Merrill Lynch & Co, parent of the giant brokerage firm that has been expanding rapidly into other financial areas, announced its first venture into residential real estate sales today.
Merrill Lynch said it would acquire a majority interest in Paula Stringer Realtors Inc., a Dallas company with about 450 agents.
Donald T. Regan, chairman of Merrill Lynch, told reporters that the Dallas real estate sales company was "the first of several real estate acquisitions" the firm expects to announce within the next few months. He said the company is negotiating to buy several other real estate agencies at the present time.
"We're not looking for Ma and Pop shops," Regan said, but rather for a firm "with a large position in its market."
Regan refused to disclose how much Merrill Lynch paid for the Stringer company. Merrill Lynch controls the largest brokerage firm in the country -- Merrill Lynch, Pierce, Fenner & Smith -- and in recent years has branched into the insurance business, real estate financing and wood products.
The company also is experimenting with brokerage accounts that resemble checking accounts, a venture that has drawn some criticism from banks.
About 10 percent of the company's $1.5 billion in revenues last year came from its non-brokerage business.
Regan, under questioning, conceded that at some point in the future the company could combine some of its brokerage offices with real estate offices, offering individuals brokerage services, real estate sales and even house insurance at the same facility.
At present, Merrill Lynch owns two insurance companies. Family Life Insurance Co. sells mortgage life protection insurance, which pays off the outstanding balance on a mortgage loan if the insured person dies.
Amic Corp., which the company acquired last month, insures lending institutions, such as savings and loan association, against mortgage defaults on residential properties.
Regan told reporters the company plans to move slowly into the real estate field and has no present desire to acquire an insurance company that writes house protection.
However, he said, after the real estate sales venture is operating smoothly, "we'll look to see what can be done" in other areas connected with home purchases and home insurance.
"More people own real estate (in addition to their homes) than other securities," Regan noted.
Merrill Lynch, Pierce, Fenner & Smith has been the largest brokerage house in the country for years. The parent company has been diversifying into other fields of finance recently because of the sharp ups and downs in the securities business over the past decade.
In another development, Regan said that Hedley Donovan, now editor-in-chief of Time magazine, has been nominated to run for director of the parent company.
Although the election will be May 1, Donovan would not become a director until June 1, when Donovan plans to retire from Time.