July 25 (Bloomberg) -- Merrill Lynch & Co., in the biggest shakeup at its investment-banking division in three years, promoted Osman Semerci and Rohit D'Souza to run fixed income and equities worldwide and said three executives in sales and trading will leave the firm.

Jeff Kronthal, 51, head of principal investments and secured financing, and Harry Lengsfield, 49, who oversaw interest-rate products and foreign exchange, are leaving to ``pursue other personal and professional interests,'' according to a memorandum distributed internally at Merrill today. The third departure is Doug DeMartin, 48, head of equity and debt sales.

The new sales and trading organization mirrors units at Goldman Sachs Group Inc., the most-profitable Wall Street firm. Semerci, 38, and D'Souza, who turns 42 this month, will oversee businesses that generated 44 percent of New York-based Merrill's $8.2 billion in second-quarter revenue.

``Streamlining the organization makes sense,'' said Jeff Harte, an analyst at Sandler O'Neill & Partners in Chicago who rates Merrill shares a ``buy.'' ``If you look at Goldman or look at Morgan Stanley, there are co-heads of sales and trading reporting up, whereas at Merrill Lynch you had a product head or group of product heads reporting up.''

The last time Merrill, the third-largest U.S. securities firm, made as big a change at its investment bank was in August 2003, when Chief Executive Officer Stanley O'Neal, 54, replaced Arshad Zakaria as head of the division with Dow Kim and Gregory Fleming. Kim and Fleming, both 43, signed today's memo.

New Responsibilities

Semerci, as head of fixed income, currencies and commodities, or FICC, and D'Souza, as head of equities, take on responsibilities previously held by Kronthal, Lengsfield and DeMartin, according to the memo, which was confirmed by Merrill spokeswoman Jessica Oppenheim.

D'Souza, who earned a bachelor's degree in mathematics and computer science from Bethany College in Lindsborg, Kansas, joined Merrill from Morgan Stanley in 2004 as head of global equity trading. He'll also be head of global markets for the Americas.

Last year, D'Souza oversaw the formation of the Strategic Risk Trading Group, a team of stock traders who make bets with Merrill's own capital. That team helped boost the firm's equity- markets revenue by 73 percent to $3.45 billion in the first half.

Semerci will retain his current position based in London as co-president of global markets and investment banking for Europe, the Middle East and Africa. After starting his career in 1990 as an equity trader in Istanbul and commodity trader in Switzerland, Semerci was hired by Merrill in 1992 as a financial consultant at the brokerage division in Geneva.

Merrill Veterans

A Turkish native, Semerci has a graduate degree in management from Istanbul's Marmara University and a bachelor's degree in electrical and electronic engineering from Bogazici University, also in Istanbul, according to Merrill's Web site.

Kronthal, who has a master's in business administration from the Wharton School of Business, joined Merrill in 1989 after working at LF Rothschild Inc. and Salomon Brothers. Lengsfield, a Penn State University MBA graduate, started his career at Merrill as a government-bond trader and moved up through the fixed-income business.

DeMartin got his start with Merrill in Chicago in 1985. He held management positions in debt and equity sales and trading and was responsible for the firm's business in Canadian markets. DeMartin has an MBA from Michigan State University.

DeMartin declined to comment when reached by telephone. Kronthal also declined to comment. Lengsfield couldn't be reached at his Merrill office.

``You never like to see pretty well respected senior managers leave,'' Harte said. ``In the greater scheme of things there's enough depth in the organization to absorb it.''

Shares of Merrill closed 46 cents, or 0.65 percent, higher in New York today at $71.57 a share.

To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net.

Last Updated: July 25, 2006 20:18 EDT