In a move likely to have a significant impact on the local real estate market, Merrill Lynch & Co. announced yesterday it has agreed to sell its 450-office national residential real estate company to The Prudential Insurance Co. Prudential, based in Newark, will pay more than $300 million, including about $280 million in cash, for a group of companies, including Merrill Lynch Realty and Merrill Lynch Relocation Management. The remainder of the sales price hinges on the group's performance after the sale is completed. Merrill Lynch Realty is one of the top-grossing residential real estate brokerages in the Washington area, with about a 10 percent share of the highly fragmented local market, and its agents are already being wooed by competitors. Merrill's 2,500 agents participated in about 15,000 local transactions last year, working out of 37 offices. Their sales accounted for 10 percent of the company's transaction nationwide. The purchase marks a major expansion by Prudential into the home sales market. The Pru currently has about 350 real estate offices, with about 4,900 sales agents, operating through a franchise system. The residential brokerages are expected to interact closely with Prudential's existing home mortgage, appraisal and insurance operations. The Realty group will be directly owned by Prudential -- and unlike some of its existing real estate operations, will not be franchised to independent owners. The sale also signals a final exit from the real estate brokerage industry for the stockbrokers and underwriters at Merrill Lynch, who entered it about a decade ago in efforts to establish the company as a complete provider of financial services, along with Sears, which bought Coldwell Banker. By mid-decade, however, both companies were beating a hasty retreat, and in the past few years, both have shed their commercial real estate operations. And while Sears has retained Coldwell Banker's residential sales offices, Merrill apparently decided to make its departure complete. "This transaction culminates Merrill Lynch's divestiture of a business which, while profitable, is not part of our long-term strategy," said Merrill Lynch Chairman and Chief Executive Officer William A. Schreyer and Chief Operating Officer Daniel P. Tully, in a statement released yesterday. But many industry observers said that Merrill Lynch's corporate management style clashed with the entrepreneurial and sales-oriented philosophy of the real estate world. "It just never worked," said Wes Foster, president and owner of Long & Foster, the Washington region's largest real estate brokerage. "They never really understood the real estate business." "Merrill Lynch basicly washed its hands of the entire business," said James A. Peterson, an executive vice president with Coldwell Banker. Merrill Lynch Realty will lose its name because of the sale, probably within 45 to 90 days. The new name for the company is likely to contain the word Prudential, but the exact wording has not yet been chosen. The top local Merrill Lynch Realty official, Ray Chappell, president of the Washington region, said he was enthusiastic about the new ownership and unfazed by the change in the corporate name. "Everybody knows the Rock," Chappell said of Prudential's long-time logo. "We're replacing the bull {Merrill Lynch's logo} with the rock -- and everybody wants a piece of the rock."