There are some possibilities, but there are no middle grounds.
Both are multi-religious, multi-ethnic arab states with internal centrifugal forces and distinct economies and infrastructures. In a sense, their commonalities are what drives them apart, they have the same strengths and same weaknesses, and so wouldn't necessarily complement each other.
One possible outcome would be that the more powerful state, probably Iraq, simply subjugates the weaker and turns it into an economic and social colony. The weaker state is reduced to a tail on the dog.
A better possibility would be a somewhat enlightened dictatorship which makes heavy investment in joint development and common infrastructure. A pipeline and highways and railroads from the Mediteranean to the Persian Gulf might be a huge advantage. The combined state of fifty to sixty million people, with the resource advantages, geographic positioning, a relatively educated population and the ability to capitalize on access to the mediteranean might even achieve first world levels of economic and social development.
The best outcome would be a non-dictatorship where diverse population and economic center prevent tyranny, and where democratic processes and political bargaining bring about joint development and common infrastructure.
The difficulty is the devolution and pursuit of autocracy. Dictatorships tend to coalesce around narrow power bases. The larger or more heterogenous society, the more difficult it is