Merger of ESOP into terminated 401(k) Plan

[Guest sheTexasHammer]

I would appreciate thoughts on this issue:

A sale of company A's stock to company B is proposed. Company A maintains a 401(k) Plan and an ESOP and company B maintains its own 401(k) plan. Prior to the stock sale, Company A will terminate its 401(k) Plan. After the closing of the deal, we would like to merge the company A ESOP into the terminated 401(k) plan and then distribute the proceeds of the new merged plan. We will comply with the 1.414(l)-1(d) requirements for merger of defined contribution plans. The merger cannot take place prior to closing because of the limited time period between now and closing.

Does anyone see a problem with merging the ESOP into a terminated 401(k) plan in this matter? There is no desire to merge the ESOP into the buyer's plan (company B's 401(k)) plan.

If we were to file a determination letter request for the terminating plan (composed of the terminated 401(k) plan which had the ESOP merged into it) we should only have to file one 5310.

[QDROphile]

I would expect a terminated plan to be in the business of liquidating, not merging with a plan from a company outside of its control group, especially an ESOP. I think the idea is penny wise and pound foolish.