American Banker staff and Bloomberg News

NEW YORK - Just a day after Merrill Lynch & Co. said it would sell its energy trading unit to focus on core business, the company said Tuesday that it would sell off part of its Herzog Heine Geduld unit.

Herzog, which Merrill acquired last summer, makes markets in Nasdaq-listed equities and over-the-counter securities. It also operates a private client business, which Merrill plans to sell for an undisclosed price to Investec Ernst & Co., an international specialist banking group headquartered in Johannesburg. The deal is scheduled to close Feb. 2.

On Monday, Merrill said that it had agreed to sell its energy commodity marketing and trading unit, Global Energy Markets, to Allegheny Energy Supply Co., a unit of Allegheny Energy Inc., for $490 million and a 2% equity interest in Allegheny Energy Supply. That deal is expected to close this quarter.

Merrill said selling Allegheny would allow the company to concentrate on its core business of trading and risk management.

A Merrill spokesman said Tuesday that the two divestitures are unrelated.

A Herzog spokesman said that selling the retail business would allow the company to focus on its primary business of making markets in stocks. Most of the unit's 120 employees are expected to take job offers from Investec, he said.

Separately, Merrill will reportedly soon replace Dan Bayly, its co-chief of investment banking. Mr. Bayly, 53, has held the position for five years. He is expected to be reassigned elsewhere in the company. A Merrill spokesman declined to comment on Mr. Bayly's status Tuesday.

Merrill's investment banking net revenue for the first nine months of 2000 jumped a record 18% from a year earlier.

This would not be the first time Merrill has reassigned top executives. Last year it named Stanley O'Neal the president, a role previously held by John Steffens, who now heads the company's brokerage business in the United States.

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