A model for the coevolution of two species in facultative symbiosis is used to investigate conditions under which species merge to form a single reproductive unit. Two traits evolve in each species, the first affecting loss of resources from an individual to its partner, and the second affecting vertical transmission of the symbiosis from one generation to the next. Initial conditions are set so that the symbiosis involves exploitation of one partner by the other and vertical transmission is very rare. It is shown that, even in the face of continuing exploitation, a stable symbiotic unit can evolve with maximum vertical transmission of the partners. Such evolution requires that eventually deaths should exceed births for both species in the ...