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The way to achieve that in TS4, is to first have the older sims you wish to be grandparents stored/saved to you Library.
The younger sim family who already live in game, take them into Cas.
While in Cas, hit your Library tab and select the stored older sims to add them to family.
Then select the Relationship options and set them as parents of the adults, which it turn automatically sets children as grandchildren. Save and return to game. One big happily related family, then finally move grandparents out to their own home.
The one annoying rule you have to abide by while doing this relationship altering, is that the new additions to the family (in this instance the grandparents) always, always, always have to come in from your Library first.
You cannot do this biologically-related trick with two sim families who already exist in your world. Existing sims have been set in stone as non-biologically related and it will fail. But via Cas and a merge from the Library, that'll do the trick for you.
"Become a government informer. Betray your family and friends. Fabulous prizes to be won!" Red Dwarf - Back to Reality.