E1 Companies vs Branches

Can anyone provide best practice information for setting up business entities as companies or branches?  For example we currently have two companies, in two different states and industries.  We want to combine them in our E1 system under a new company.  Should we create one new company with two branches (the existing companies) or should we create 3 companies with the two existing companies consolidating under a parent company?  Thank you for your insight.