Hangouts 2.1 merging conversations

"There's a new version of Google Hangouts on the way, and it's going to bring some substantial improvements. Version 2.1 of Hangouts for Android's biggest change is going to be in the way that it handles conversations with the same person over multiple channels. Currently if, say, I'm conversing with Phil over SMS through Hangouts, it'll be a separate conversation than our instant message-style Hangouts chat. With Hangouts 2.1, those two conversations will be merged into one continuous discussion."

Finally!