The Irish Times newspaper reported on New Year’s Eve that it had been told by senior sources from the two parties that an alignment would result in “one all-island party which will be called Fianna Fáil”.
The paper’s Northern Editor Gerry Moriarty wrote that the final stage of negotiations are still ongoing.
But he added that a “significant” announcement is expected soon, possibly as early as next month, said sources from Fianna Fáil and the SDLP.
The merger talks have not met with total approval within the party founded by John Hume.
Mairia Cahill, a co-opted SDLP councillor and who was an Irish Labour Party Senator in the Republic, described the talks not as a merger but more of a “takeover” by Fianna Fail.
And SDLP Youth has also confirmed its objection to any such merger.
In a tweet the organisation wrote: “We would like to reaffirm our position as carried at our Policy Conference in August 2018: SDLP Youth is against any merger, working arrangement, etc with any party whose values and principles are contradictory to the values and principles of the SDLP.”
In his New Year message, SDLP leader Colum Eastwood said the party was ready to “embrace” change but didn’t mention the ongoing talks with Fianna Fail.
The Foyle MLA added: “The incoming year will, no doubt, prove to be challenging for us all.
“The SDLP is determined to continue to fight for people here.
“We will continue to argue against Brexit, we will forcefully make the case for a return to Stormont and we will never stop pointing out that we badly need to be represented in every forum.
“With all the political change we are experiencing it is important to point out that we too are ready to embrace change.
“Since our foundation the SDLP has led much of the political advancement that Ireland has experienced.
“We want to lead that change again. We are determined to ensure that we are in a position to do so,” added Mr Eastwood.
Talks of a SDLP/Fianna merger has prompted the Irish Labour Party to throw its hat into the ring of North of Ireland politics.
Irish Labour leader Brendan Howlin has announced his party will “step in” to politics here if the SDLP “allies with” Fianna Fail.
Mr Howlin hinted his party could offer assistance to SDLP members unhappy with a possible merger.
“It is a matter for the membership of the SDLP to chart their future direction,” he said.
“But I am conscious that many in the SDLP feel closer to the Labour tradition than to the conservative nationalism of Fianna Fáil.
“I am mindful of the links built up by John Hume and others with our sister parties in the Party of European Socialists.
“These links were instrumental in building up support for Northern Ireland across Europe.
“At our own conference in November, I said that the Labour Party would step in if the SDLP allies with Fianna Fáil.
“What that means is that we will actively support our comrades in Northern Ireland to continue to put a social democratic option to the people at elections.
“People in Northern Ireland must be empowered to lead on how to pursue Labour politics, not dictated to by any party from south of the border,” added Mr Howlin.