Speculation is mounting about a closer tie-up between UnitedLinux consortium members SuSE and TurboLinux, with the pair believed to be in discussions over a possible merger.

SuSE senior executives last week returned from a Far East visit where they held talks with TurboLinux.

SuSE chief executive Richard Seibt would not confirm or deny the rumours, saying only that "we work closely together".

He later added: "Hardware vendors, SMEs and large companies only want two Linux distributions worldwide. They don't want to add cost."

A merger between the two would be a natural fit, as there is little territorial overlap. SuSE is strong in Europe and growing fast in the US, while TurboLinux operates across Asia.

Analysts believe that a merger would make good commercial sense. Gary Barnett, principal consultant at Ovum, commented: "UnitedLinux hasn't been a great success anyway.

"As a concept it appeared to create an alternative to Red Hat, but it is not taken particularly seriously. The notion of a merger certainly creates a much more meaningful alternative."

Mark Blowers, senior researcher at analyst Butler Group, added: "A closer link-up is a logical extension for the consortium and it will be stronger globally against Red Hat."

Meanwhile, the simmering anger between SuSE and SCO has cooled. SuSE is no longer threatening action to remove SCO from the consortium, with Seibt insisting that SCO had nothing more to contribute.

"SCO has decided that it won't take an active part [in UnitedLinux]. There is no need to take any action to throw it out," he said.

But SCO wants to stay within the four-company group and continue developing UnitedLinux 2.0, once issues around its intellectual property are resolved.

The company told vnunet.com in a statement: "SCO is a founding member of the UnitedLinux consortium and will continue to be a member for the foreseeable future."

Barnett dismissed SCO's claims, maintaining that the company was obliged to issue such a statement.

"SCO's future involvement in UnitedLinux is all pretty moot," he said. "For good or ill, it has separated itself and opponents will be able to say that its continued membership only taints UnitedLinux."