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Both companies continued to manufacture their separate Automobile and Internal Combustion Engine brands until, on June 28 , 1926 , when Benz & Company and DMG finally merged into Daimler-Benz AG, agreeing that thereafter both would baptize all automobiles as, Mercedes-Benz . The inclusion of the name, Mercedes, in the new brand name honored the most important model of the DMG cars, the Mercedes 35hp , which had derived its name from the daughter of Emil Jellinek . Jellinek became one of DMG's partners in 1900, created the brand name, and made the new automobile famous through Motorsports . The name of Daimler as a brand of automobiles had been sold for use by other companies, so it would have created confusion to include it in the new brand name. Karl Benz died in 1929 . Although Daimler-Benz is best known for its Mercedes-Benz automobile brand, it also created a notable series of aircraft, tank, and submarine engines during World War II. In 1998 Daimler-Benz AG merged with the American automobile manufacturer, Chrysler Corporation , and formed DaimlerChrysler AG . |