Moving to compete in the quickly consolidating Canadian financial services market, Merrill Lynch & Co. said Monday it would buy the country's largest brokerage, Midland Walwyn Inc., for about $855 million.

The deal, a pooling of interests, would re-establish Merrill as a dominant force in the Canadian retail brokerage market, which it left in 1990. It would also earn Merrill a place among the top three Canadian firms in debt and equity underwriting and trading, as well as mergers and acquisitions advisory.

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