(June 6 – 8:50 ET) — Merrill Lynch & Co. has reportedly agreed to buy Herzog Heine Geduld Inc., a privately held NASDAQ market maker for about US$1 billion.
Neither party is yet willing to confirm the deal, but it is being widely reported nevertheless. Dow Jones Newswires broke the news.
Jersey City, NJ-based Herzog is NASDAQ’s third biggest market maker and this deal puts Merrill back in the thick of a business it largely left several years ago. Herzog also acts as a market maker in Germany and Britain.
The recent boom in market volumes has suddenly turned market making into a profitable business, sending several brokers back into the business in a big way. This deal should make Merrill the second biggest market maker on the Street, just ahead of Charles Schwab and behind market leader Knight Group Inc. The stocks of Merrill, Knight and Schwab all dropped on the news.
-James Langton