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If the humans could find the Merovingian's hideout multiple times, surely the Machines would be able to do it as well. The Merovingian had a bunch of obsolete programs from an older version of the Matrix, why didn't the Machines send Agents against them or just outright delete them?

We might say they value intelligent beings and don't destroy them without reason (this is one theory why they use humans and not cows), but we can see that the Agents try to eliminate the Keymaker, and they make it clear they don't view him as a person.

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The short answer is "we don't know" but we can take some educated guesses;

His soldiers are formidable and may be a match for the Agents;

While we see Neo and Niobe doing reasonably well against the Frenchman's collection of freaks and monsters (ghosts, ghouls and werewolves, etc) there's no indication of whether he has other resources he can call upon. A frontal assault against his club by Morpheus and Trinity is only effective with the assistance of the Merovingian's former Henchman; Seraph (AKA "Wingless") and Morpheus and Trinity have very great difficulty against the ghostly twins.

He can cross the machine/matrix barrier

The Trainman works for the Merovingian and literally transports programs from the 'Machine City' to the Matrix. Additionally, his train station appears to be another form of Matrix, but apparently one that's not under the control of the Mainframe or the Agents. If attacked, presumably the Merovingian could either hang out in the train station or hide in the Machine City until the Agents stop looking for him. We know he can also use the "back doors" to move around (presumably as a result of his association with the Keymaker), making a direct attack all but useless.

He's survived previous purges and resets

"I have survived your predecessors and I will survive you", he says to Neo. The Oracle calls him "one of the oldest of us". Clearly he's well used to having to find ways of surviving. There are some non-canon suggestions on the Matrix Wikia that he may have even been the primary O/S for the second "nightmare" matrix.

On top of that, the fact that he has access to creations from previous versions of the Matrix would strongly suggest that he has power and influence well beyond anyone but the Machine Mainframe itself.

He's just another form of control...

Just as the humans are controlled by the periodic release of "red-pills" (e.g. those who cannot or will not accept the reality of the Matrix) there's a pretty solid rationale that the Merovingian acts in the opposite way, transporting malcontent programs from the Machine City into the Matrix where they can do less harm. Imagine if one of your power-plant programs decided to go berserk because their child was being deleted...

That being the case, perhaps the Agents leave him alone simply because hassling him would lead to more trouble down the line.

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    So, you basically mean that destroying him wouldn't be trivial, they could only destroy him with considerable effort. And because he doesn't do too much harm, this effort is not worth it. For example, the Agents just terminate an exile if they happen to come across one, but they don't spend too much effort in explicitly hunting them? – vsz Mar 7 '14 at 20:39
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    @vsz - Yes although I personally I lean towards the last answer which is that he's the machine form of Zion, a safety-valve for malcontent programs. As long as he keeps his head down and doesn't interfere with the Mainframe's plans, there's no need to swat him. – Valorum Mar 7 '14 at 20:42
  • I like the last explanation as well. The Merovingian has some uses, and doesn't interfere too much with the system. As for the rest of the exiles, it's still better if they hang around the Merovingian's place, than running amok all around the Matrix. If the humans see government agents hunting ghosts and vampires, they might question their "reality". – vsz Mar 9 '14 at 10:02
  • I know it’s almost 4 years later, but just wanted to let u know the 2nd YouTube vid/link is dead. – iMerchant Oct 3 '17 at 3:50
  • @iMerchant - Better now – Valorum Oct 3 '17 at 7:16
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It is possible, that if the Machines try to attack the Merovingian, he knows it in advance, and undermines it.

I am a trafficker of information. I know everything I can.

They cannot outright delete him: it seems the Machines cannot simply 'unplug' parts of the Matrix, for some reason. In the Animatrix: Beyond, the ghost house is not cleared automatically but instead erased 'manually' by authorities in-Matrix. But why are 'rogue programs' not killed by Agents?

What are Agents?

Inside the Matrix, they are everyone and they are no one. Anyone that we haven't unplugged is potentially an Agent.

They run on the 'bluepills'.

The Merovingian can control 'the regulars' of the Matrix (bluepills).

Look there, at that woman, my god, just look at her. [...]

He sends her a program.

I wrote it myself, [...] each line of the program, [...] creating a[n ...] effect.

He explains it.

She can't understand? [...] Soon, it doesn't matter. [...] This is the nature of the universe. [...] Causality. There is no escape from it.

In the Animatrix: Detective story, it seems humans can have some resistance on becoming an Agent, by their free will. Mr. Ash resist turning into an Agent. In the Matrix, after picking him up at the Adams Street bridge, Neo is still a bluepill but once unbugged they trust that he will remain a human.

But the Merovingian achieves controlling, or rather, manipulating, the humans in a way that they do not resist anymore.

No bluepills: no Agents: no threat.

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