BUG: merge_ordered fails with list-like left_by or right_by

doc/source/whatsnew/v1.2.0.rst

@@ -737,6 +737,7 @@ Reshaping
 - Bug in :meth:`DataFrame.apply` not setting index of return value when ``func`` return type is ``dict`` (:issue:`37544`)
 - Bug in :func:`concat` resulting in a ``ValueError`` when at least one of both inputs had a non-unique index (:issue:`36263`)
 - Bug in :meth:`DataFrame.merge` and :meth:`pandas.merge` returning inconsistent ordering in result for ``how=right`` and ``how=left`` (:issue:`35382`)
+- Bug in :func:`merge_ordered` wasn't able to handle list-like ``left_by`` or ``right_by`` (:issue:`35269`)
 
 Sparse
 ^^^^^^

pandas/core/reshape/merge.py

@@ -140,9 +140,7 @@ def _groupby_and_merge(by, on, left: "DataFrame", right: "DataFrame", merge_piec
 
         # make sure join keys are in the merged
         # TODO, should merge_pieces do this?
-        for k in by:
-            if k in merged:
-                merged[k] = key
+        merged[by] = key
 
         pieces.append(merged)
 

pandas/tests/reshape/merge/test_merge_ordered.py

@@ -115,3 +115,35 @@ def test_doc_example(self):
         )
 
         tm.assert_frame_equal(result, expected)
+
+    def test_list_type_by(self):
+        # GH 35269
+        left = DataFrame({"G": ["g", "g"], "H": ["h", "h"], "T": [1, 3]})
+        right = DataFrame({"T": [2], "E": [1]})
+        result1 = merge_ordered(left, right, on=["T"], left_by=["G", "H"])
+        result2 = merge_ordered(left, right, on="T", left_by=["G", "H"])
+
+        expected = DataFrame(
+            {
+                "G": ["g"] * 3,
+                "H": ["h"] * 3,
+                "T": [1, 2, 3],
+                "E": [np.nan, 1.0, np.nan],
+            }
+        )
+
+        tm.assert_frame_equal(result1, expected)
+        tm.assert_frame_equal(result2, expected)
+
+        result3 = merge_ordered(right, left, on=["T"], right_by=["G", "H"])
+
+        expected = DataFrame(
+            {
+                "T": [1, 2, 3],
+                "E": [np.nan, 1.0, np.nan],
+                "G": ["g"] * 3,
+                "H": ["h"] * 3,
+            }
+        )
+
+        tm.assert_frame_equal(result3, expected)