LONDON, EENGLAND (Reuters) - Mercedes' decision to buy Formula One champions Brawn and sell their stake in McLaren is good for all those involved, according to McLaren co-owner and former team head Ron Dennis.

"This is a win-win situation, for both McLaren and Daimler," Dennis said in a McLaren statement after the deal was announced on Monday.

"I've often stated that it's my belief that, in order to survive and thrive in 21st-century Formula One, a team must become much more than merely a team," added the former principal who handed over to Martin Whitmarsh this year.

"That being the case, in order to develop and sustain the revenue streams required to compete and win grands prix and world championships, companies that run Formula One teams must broaden the scope of their commercial activities."

Daimler chairman Dieter Zetsche, whose company owns Mercedes, told reporters that the relationship with McLaren had been tested by the Woking company's determination to emulate Ferrari as a maker of road cars.

"That was not the interests of Daimler and Mercedes-Benz," he said.

McLaren built a limited edition sportscar in the 1990s and plan to market a new MP4-12C car, that would compete against the likes of Ferrari and Mercedes, in 2011.

"The next few years will be a very exciting time for McLaren, during which period we intend to become an ever-stronger technological and economic force," said Dennis.

"Formula One will always be a core activity, for sound business reasons as well as for historical sporting reasons."

McLaren said they had agreed a phased buyback of Daimler's 40 percent stake by 2011.

Dennis and Saudi business partner Mansour Ojjeh each own 15 percent of the business with 30 percent held by Bahrain's state holding company Mumtalakat.

McLaren Automotive, headed by Dennis, will be spun out of the main McLaren Group.

Mercedes will continue to supply engines until at least 2015 and possibly longer and the team will continue with their current livery under the name of Vodafone McLaren Mercedes.