(June 6 -13:00 ET) – Merrill will enter into a pooling of interests transaction with Herzog Heine Geduld, the third-largest NASDAQ market maker. The deal will expand the number of NASDAQ and other over-the-counter stocks in which Merrill Lynch makes markets to more than 8,000 from 650. The transaction is expected to be add immediately to Merrill Lynch’s earnings.

Herzog brings the execution business of more than 475 external broker-dealers — much of which is driven by online trading — to Merrill Lynch. “We are delighted that Herzog Heine Geduld has agreed to join the Merrill Lynch family,” said David H. Komansky, chairman and CEO of Merrill Lynch. “It is an outstanding firm with a strong culture of professionalism that has moved aggressively in recent years to expand its market share and reach into the online-execution business.”

Herzog will retain its name and operate as a wholly owned subsidiary of Merrill Lynch & Co. Herzog’s president and CEO, E. E. (Buzzy) Geduld, will become chairman and CEO of Herzog Heine Geduld. John E. Herzog will become chairman emeritus.

“We’re very proud of what we have achieved at Herzog Heine Geduld over the years as a privately held market-maker,” Mr. Geduld said. “Now, with the backing of Merrill Lynch’s enormous financial resources and outstanding leadership, we are ready to expand our services aggressively in Europe and other global markets.”