You have to adjust that manually (or via a macro).

Jim Rech wrote a macro called AutoFitMergedCellRowHeight that you may like:
http://groups.google.com/groups?thre...%40tkmsftngp05

If you're new to macros, you may want to read David McRitchie's intro at:
http://www.mvps.org/dmcritchie/excel/getstarted.htm

wchernock wrote:

The merged cells do not auto row height properly and therefore do do word
wrap. If you manually size the row, it will word wrap properly.

--

Dave Peterson