SIMPLE 401(k) and successor plan issue?

[Guest rarnedt]

Is termination and (rollover) distribution of a SIMPLE 401(k) plan subject to the successor or "alternative" defined contribution plan restriction of 1.401(k)-1(d)(4)(i) same as a regular 401(k) plan?

Client A buys target B. Target B has SIMPLE 401(k). Client A has defined contribution plan. After acquisition, client wants to terminate B's SIMPLE 401(k) and let the 2 participants in the SIMPLE rollover to an IRA. Thereafter those 2 SIMPLE participants will participate in client's DC plan. This seems like a problem to me, but I am not wise in the ways of SIMPLEs.

I appreciate the help.