Yep. As well as Golden Axe Beast Riders and I think Iron-Man game. To me it was less of a merger and more of a consumation. Sammy devoured Sega and redistribute what was left of them to other subsidiaries Sammy owned. They kept the name "SegaSammy" and made a new "Sega" to continue the video game business with but this new Sega was more of a Frankenstein of Sammy's subsidiaries. But yeah Sonic '06 was the first Sega game after the merger, and you can tell it shows for it to this day.
Unlike Sonic Unleashed, Sonic Generations and Sonic & All-Stars Racing Transformed,
SEGA even delisted Sonic '06 from XBox shop.
Guess even SEGA themself is ashamed of how the game turned out to be.