Rolls-Royce replaced Blythe at the beginning of the year, hiring former BNFL director of corporate affairs Colin Duncan.
At Merlin, which is led by MD David Simonson and CEO Paul Downes, Blythe is tasked with developing the agency's expertise in retail, engineering and utilities, drawing on his experience of seven years in-house and prior consultancy work with Brunswick.
'My role is a judicious mix of trying to bring in new business and working on existing clients,' he said. 'The challenge here is to grow the business.'
Blythe started his career in Whitehall in the 1980s, where he handled issues concerning British Steel, Rover Group and British Shipbuilders.
He also previously acted as head of PR at NatWest, before joining Brunswick.
On his decision to leave Rolls-Royce, Blythe said: 'It is a great brand and company, but after seven years in-house, I wanted to get back to consultancy work.'
Blythe's appointment follows just five months after former Alliance & Leicester group head of corporate communications Paul Lockstone joined Merlin as a director.
Philip Ranger, previously director of corporate communications for Charterhouse Bank, also recently joined as a director.
Merlin employs 20 staff, seven of whom are directors, and has clients including Airbus, the BBC, Regent Inns and The Man Group.