Mergers and Now: Defense By Mercedes

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The battle was drawn out and acrimonious, but it finally concluded in less time than it takes a Mercedes to eat up a stretch of an autobahn. Daimler- Benz, the company that makes Mercedes cars and trucks, bought its way into the top ranks of West Germany's defense contractors. The carmaker last week struck a $150 million deal to take over Dornier, West Germany's second largest aerospace manufacturer (1984 sales: about $500 million).

The Daimler-Benz offer was resisted for months by Claudius Dornier, 70, eldest of six family shareholders of the company that caught the world's attention in 1929 by building the largest airplane at that time, a twelve- engine flying boat. Dornier now builds sleeker craft, like the Alpha Jet for NATO. Pressured by the five other family members, Dornier finally consented, allowing Daimler-Benz to buy 68% of the company.

The agreement follows Daimler's purchase, for $160 million, of the remaining 50% of MTU, a leading maker of military-aircraft engines and high-performance marine diesels. Daimler-Benz Spokesman Hans-Georg Kloos stressed that the technology gained by the purchases will help his company build better cars, and added that the firm is not "abandoning the streets for the skies."