.hgrc

[merge-tools]
keepthat.executable = sh
keepthat.args = -c 'cp $local $output.original && cp $other $output'
keepthat.premerge = True

[alias]
merge-preferring-theirs = merge --tool keepthat

gistfile1.txt

$ hg merge-preferring-theirs
...
performs a merge, and for any files with conflicts it will
use the other revision's version of that file, while copying
your current revision's version to a "*.original" file.
...
$