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Shelton Corporation and Davis Corporation want to join forces as one corporation because their businesses are complementary. They would like the resulting corporation to have a new name, because both of them have been involved in high profile lawsuits due to environmental issues. Shelton is a manufacturer with a basis in its assets of $2 million (value of $2.9 million) and liabilities of $500,000. Davis is a distributor of a variety of products including those of Shelton's. Its basis in its assets is $1.2 million (value of $2 million) and it has liabilities of $400,000. Given these facts, which type of reorganization would you suggest for Shelton and Davis?

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