Company Acquisition and HCEs

I have a client (Company ABC) that is in the processes of purchasing another company (Company XYZ). It is a Stock Sale set to close on 9/30/21

Company XYZ has a plan but they are terminating before the sale. Company ABC has a plan but it excludes HCEs (except for age 50 for catch-up only) due to failing ADP test. Since it is a Stock Sale, are the HCEs of XYZ, HCEs from day one in ABC?

I would think yes since it is a Stock Sale, the employees of XYZ are treated as though they were always employees of ABC. Is there some grace period for those employees?

The client is wondering if the HCEs of XYZ would be able to participate in the 401k until 12/31/21.

Additionally, if the HCEs from XYZ are HCE after the sale, would they be allowed to roll money into the ABC plan even if they are not 50? The plan does permit rollovers for eligible employees or foreseeably eligible employees. Could we draft an amendment that would allow the under 50 HCEs to roll their retirement into the ABC plan?

If they bought the stock they bought the history. HCEs of ABC in 2021 will be HCEs of XYZ after the purchase.

5+% owners of ABC in 2021 will be HCE's of XYZ in 2022.

Employees that have compensation over the HCE comp limit (unless not in TGP and that election is made) combined from ABC & XYZ in 2021 will be HCEs in 2022.