my $str1 = "12345 ABC 987 MNO";
my $str2 = "      CDE";

sub merge {
  my $s2 = $_[1] =~ tr/ /\x{0}/r;
  return $s2 | $_[0] & ( "\x{ff}" x length $_[0] ^ $s2 =~ tr/\x{00}/\x{FF}/cr );
}

print merge( $str1, $str2 ), "\n";

##</code><code>##

12345 CDE 987 MNO