There are more than a few threads in Mercedesshop's archives about the Ford Mustang sensor, but the answer to your questions is yes, you splice the leads from the old Mercedes sensor onto the new Mustang's.

The sensor for the 1990 Ford Mustang 5.0L V8 (Bosch PN 13942) has metric threads (with a little Anti-seize already on them), and virtually is the same sensor unit. The only differences between the Ford sensor and the Mercedes sensor is 1) the end connector and length of wire; 2) name of the car it goes into - based on the salesman's computer database; and 3) PRICE!!!!! If you're buying the sensor from a non-Ford parts dept (Autozone, NAPA, PepBoys, etc.) they may tell you they have more than one sensor for the application, but the only difference is the wire lead length, which you're not going to use anyway. Just get the cheaper one. Also, some Mustangs had two sensors, so don't let the parts guy sell you two for your non-existent pony car.

The sensor in the W201 is the three-wire type, (with two white heater wires), To fit, cut off the Ford connector and solder the existing Mercedes connector on to it (while matching wire colors), and install. .