Este es el codigo que utilize:
Código PHP:
<?php
// Create image instances
$dest = imagecreatefromjpeg('yo.jpg');
$src = imagecreatefrompng('keko.png');
// Copy and merge
imagecopymerge($dest, $src, 0, 0, 0, 0, 861, 930, 75);
// Output and free free from memory
header('Content-Type: image/png');
imagepng($dest);
imagedestroy($dest);
imagedestroy($src);
?>