diff -r bd9b84b9a84b -r dbc3846c09a1 mercurial/merge.py
--- a/mercurial/merge.py	Tue Mar 13 21:54:34 2007 -0700
+++ b/mercurial/merge.py	Wed Mar 14 01:26:09 2007 -0500
@@ -493,9 +493,9 @@
     if not partial:
         recordupdates(repo, action, branchmerge)
         repo.dirstate.setparents(fp1, fp2)
+        if not branchmerge:
+            repo.dirstate.setbranch(p2.branch())
         repo.hook('update', parent1=xp1, parent2=xp2, error=stats[3])
-        if not branchmerge:
-            repo.opener("branch", "w").write(p2.branch() + "\n")
 
     return stats