DEV and PROD will be different physical machines and you;ll be logged on to one or other but not both.
You'll need to do an extract from PROD, a multi-load into DEV and then do the MERGE.
Remember, there may be data protection issues to considerhere. Do you really want Developers to have (unsanatized) access to Production data?
This UPDATE/ELSE syntax allows you to insert/update data via an ETL tool. The merge syntax requires you name a second table and because of that it will NOTwork with ETL whose goal would be to insert a known and valued row into the table from a source other than a teadata table. (ie. XML,JSON)