He's absorbed in a steel merger (5)
I believe the answer is:
elmer
'he's' is the definition.
'absorbed in a steel merger' is the wordplay.
'absorbed in' indicates a hidden word.
'ELMER' can be found hidden inside 'a steel merger'.
(Other definitions for elmer that I've seen before include "name" , "Man" , "____ Rice, US dramatist" , "- - Gantry (book, film)" .)