501(c)(3) Entity acquires 501(c)(3) entity-coverage issues

[Guest dietpepsi]

One 501©(3) entity (entity A) sponsors a 401(k) plan and acquires 100% of the assets of another 501©(3) entity (entity B) that sponsors a 403(b) plan. Entity B will keep it's own tax ID#. Entity A wants Entity B to keep it's 403(b) plan. There is a special rule for coverage that says, "For purposes of the 401(k) plan's coverage, the employees eligible to contribute to the 403(b) plan are excludible if:

1. no employees of the tax exempt entity is eligible to participate in the 401(k) plan and

2. 95% of the employees of the non-exempt entity are eligible under the 401(k) plan."

This rule does not seem to apply since neither entity is "non-exempt". So would they not be able to exclude the employees of the other entity when doing coverage?

Thanks