Canadian Company Becoming Parent and Sponsor

Existing U.S. company sponsors a 401(k) plan and is to be acquired by a Canadian corporation, which has an existing U.S. subsidiary with U.S.-based employees and U.S.-based employees of its own.  Upon acquiring the U.S. company that sponsors the plan, the Canadian corporation intends to become the plan sponsor, having its own U.S.-based employees participate, as well as the employees of its existing U.S. subsidiary and the employees of its newly acquired U.S. company.  Any problems with this concept?

The Canadian corporation owns other entities in various countries outside the U.S., but no other U.S.-based organizations.

Is this a stock purchase or an asset purchase? If a stock purchase, then the concept is correct. If this is an asset purchase then there are other considerations that I won't try to address.  

Thanks, WCC!

The Canadian corporation is acquiring the stock of the U.S. company that currently sponsors the plan.  The Canadian company, which already has a wholly owned U.S. subsidiary, will become the plan sponsor.  The U.S. company that is about to become a wholly owned subsidiary of the Canadian company will no longer be plan sponsor but will be a participating employer.  The already existing U.S. subsidiary of the Canadian corporation will also be a participating employer.  In addition, U.S.-based individuals who are employed directly by the Canadian corporation will be eligible to participate.

If I understand your comment correctly, all of this should be okay, given the context of a stock acquisition by the Canadian corporation.