We present the results of observations both in imaging and spectroscopy of the nearby active galaxy ESO 202-G23 (Carafe Nebula). The main result of this investigation is that the peculiar morphology of the galaxy, formerly attributed to the presence of an asymmetric bar, is produced by the merging of two galaxies both hosting an active nucleus. Our deep R image reveals unexpectedly the presence of a knot (G2), not visible in the B image, at 3.5 kpc on the northern of the nucleus (G1), classified in the literature as a Seyfert 2. A long-slit spectrum provides evidence that G1 is a Seyfert 1.5 nucleus and that G2 is also a nucleus, showing features typical of a LINER heavily reddened by dust. The presence of tails and plumes in the outermost parts of the galaxy and the double U shape of the rotation curve of the gas around G1 and G2 strongly support the hypothesis of a merger that occurred 106–109 years ago, as suggested by the comparison of the current (14 M⊙ yr-1) and the recent (24 M⊙ yr-1) star formation rates. The system ESO 202-G23 is an infrared bright source (LFIR/L⊙ = 2.18 × 1010) and the IRAS flux ratios suggest a predominantly thermal origin of the infrared emission. The analysis of the IRAS data allows us to obtain some important properties concerning both the gas and the dust: Td(warm) ~ 36 K; Md(warm) = 4.1 × 106 M⊙; Td(cold) ~ 21 K; Md(cold) = (6.9–8.3) × 107 M⊙; MH I = 8.6 × 109 M⊙; MH II = (2.3–4.3) × 109 M⊙; Mgas = (1.1–1.3) × 1010 M⊙. The derived mass-to-light ratio MH I/LB = 2.23 and the value of the parameter K = vmax/rmax, K(G1) = 201, K(G2) = 179, indicate that the precursor is not later than Sbc.