Merge 2 lines with delimiter

[snippsat]

Or am I wrong?

It will not work like this when reading from a file,x and y variables will just be overwritten when read each line from file.
Therefor is it easiest to first make a list as @nilmao dos,then make changes on list.
Here an other approach.

def line_concat(lst):
    temp = zip(lst[::2], lst[::-2])
    return [':'.join(i) for i in temp]

with open('xy.txt') as f:
    lst = [line.strip() for line in f if not line.isspace()]

Test.

>>> lst
['xxx.xxx.xx.xx', 'yyyy', 'xxx.xxx.xx.xx', 'yyyy']

>>> line_concat(lst)
['xxx.xxx.xx.xx:yyyy', 'xxx.xxx.xx.xx:yyyy']
>>> for line in line_concat(lst):
...     print(line)
...     
xxx.xxx.xx.xx:yyyy
xxx.xxx.xx.xx:yyyy