Yet again this 'What if' has returned to me...
Reading through 5'3 no.48, more details of this merger, er, emerges.
Apparently a series of negotiations between the MGWR and the GNR took place during the early 1920s, collapsing due to disagreement regarding relative value of each companies shares. The GNR saw benefit in the merger in that cattle traffic could be rerouted toward Belfast rather than Dublin!
A major proponent of the amalgamation was H.G Burgess, then deputy general manager (later promoted to General Manager) of the LMS and was later on the board of directors of the GSR, and had great pull in the ultimate amalgamation into that company and in many affairs of the early Free State.
His proposal was a merger of the MGW and GNR into a 'Northern and Western' Railway under influence of the LMS. It's mentioned neither government north or south had any objection to such a proposal and james craig was in favour for the same reason the GNR was, ie more traffic routed to Belfast.
The article brings up the question of the SLNCR possibly being consumed by the company, Amiens Street potentially taking over Broadstone's passenger traffic akin to Westland Row in our timeline, and the possibility of 4-6-0s for the new company considering the generous size of Broadstone's erecting shop compared to Dundalk. (the proposal for the 'rebuilt' woolwiches into 4-6-0s comes to mind!)