They probably don't need to merge but there is commercial sense in closer co-operation. For example, bmi becoming, in effect, Virgin's domestic/European feeder service and vice-versa. One or other might need to migrate terminals at LHR but we shouldn't be surprised to see some schedule co-ordination & perhaps code-sharing.
Surely such closer co-operatin would push VS closer to Star membership? Certain anti-alliance slogans have been quietly omitted from new-livery paint-jobs...