If the attacker does not defeat the defenders, they never actually enter the battle space. How/when do co-existence battles happen?

Here's two I can think of..

1. The order card "Drop Pods" allows you to deploy Chaos Marines directly into an enemy's space but not attack. A coexistence battle would take place at the next initiative change. There's likely other cards that allow this to happen.
2. An imperial unit changes sides (for example in the Corruption phase in the beginning of the game) leaving it in the same area as loyal units.

I don't think it's very common though ...

J-Tech said:

Think of the combat example with the Fabricator General. The Chaos Space Marines killed the Imperial Army and because the Hero is no unit, so they can move into the area. But at the change of initiative it will trigger a co-existence battle.

Yah, good points.

So in that Hero example, since an area is only controlled if you have a Unit there (ie. NOT a Hero), even if said Fabricator General eventually defeats the Chaos forces there, it will still only revert back to neutrally controlled?

Also, isn't it kind of odd that the FabGen is included in the likes of the Emperor, Horus, and the Space Marine Primarchs (in regards to hit points and combat ability)? Like, isn't he just some dude with cybernetics who makes weapons? How is he even close in ability in combat to any of the titans of men?

Mechanicum adepts/priests/whatever can hold their own against Marines, their "upgrades" give them a lot of upsides. Granted, I wouldn't probably put Kane (Fabricator General) on the same field as any of the Primarchs, but since it represents "Hero and his entourage", you could assume FG has a bigger entourage of Mechanicum people than the Primarchs, thus upping him to their level combatwise.

In his own way, the forces at the disposal of the FG would be just as deadly as anything the Imperium could come up with. You have Skitarii, with their gene enhanced bodies, combat servitors or all manner of deadly cannons and devices stretching back to the Dark Age of Technology. The FG himself would have all manner of bionic upgrades that might allow him freedom of movement, flight, superior armour, and specialized weaponry on his person, as well as a fairly comprehensive understanding of the weaponry and armour of any hero he was facing.

Although Kane would not, in truth, be able to go 'toe to toe' with a Primarch, Dam is right to say that he would be able to pull all manner of surprising gadgets out to make him very hard to kill. In the 30th Millenium the rule of the Emperor was less repressive (although pretty harsh still) compared to the 41st Millenium, so there would have been all manner of objects at the disposal of the Mechanicus that could have been more openly used. Even in the 41st Millenium there are things that the AdMech hide from their Imperium allies. All this is to say that the FG would be a more dangerous opponent than expected, and able to take the field with considerable forces.