The Cost of Increasing the File Size
In general, for a K-way merge of K runs where each run is as large as the memory space available, the buffer size for each of the runs is: (1/K)* size of memory space = (1/K) * size of each run.
So K seeks are required to read all of the records in each individual run and since there are K runs altogether, the merge operation requires K2 seeks.
Since K is directly proportional to N, the number of records, SortMerge is an O(N2) operation, measures in terms of seeks.