HOUSTON, Dec. 23 /PRNewswire/ -- American General Corporation (NYSE: AGC)
and Home Beneficial Corporation (Nasdaq: HBENB) today jointly announced a
definitive agreement under which American General will acquire Home Beneficial
for a total consideration of $665 million or $39.00 per share.  The
transaction, which is subject to approval by Home Beneficial's shareholders
and requisite regulatory authorities, is expected to close at the end of the
first quarter of 1997.
    Home Beneficial's shareholders may elect to receive either cash or
American General common stock.  The transaction will be tax free for Home
Beneficial shareholders exchanging their shares for American General common
stock.  Total cash elections by Home Beneficial shareholders will be limited
to 50 percent of the aggregate consideration, while stock elections will be
limited to 75 percent.  The exchange ratio for American General common stock
will be determined by dividing $39.00 by an average trading price of American
general common stock prior to closing and is subject to a maximum of
1.1143 shares of American General for each Home Beneficial Corporation common
share.
    "Home Beneficial is an excellent strategic fit with our Nashville-based
life insurance subsidiary," said Robert M. Devlin, president and chief
executive officer of American General.  "Both companies offer similar life
insurance products, utilize a career agency distribution system, and operate
in similar geographic regions.  Through the combination of these two
companies, we believe we can achieve economies of scale resulting in annual
expense savings of $20 million.  Over its 97-year history, Home Beneficial has
been conservatively managed.  Based upon capitalization targets for American
General's life insurance subsidiaries, Home Beneficial has excess capital of
$300 million.  We expect the transaction to be non-dilutive to earnings within
one year of closing.
    The Home Beneficial acquisition will mark American General's third life
insurance company acquisition over the past two years for a total
consideration of $2.2 billion.  These acquisitions are consistent with
American General's growth strategy that includes opportunistic participation
in the consolidation of the financial services industry."
    In commenting on the transaction, R.W. Wiltshire, Jr., president and chief
executive officer of Home Beneficial Corporation said, "We are confident that
American General's commitment to building shareholder value over the long term
will benefit Home Beneficial shareholders that elect to receive American
general shares.  American General's strong financial position and dedication
to meeting customer needs will benefit the customers and agents of Home
Beneficial.  We have long admired American General's success in the life
insurance industry through its focus on the career agency distribution system.
This transaction provides the opportunity for our company to become part of
one of the nation's largest and most respected financial services
organizations."
    Founded in 1899 and headquartered in Richmond, Va., Home Beneficial
Corporation has assets of $1.4 billion and life insurance in force of
$11 billion.  As of Sept. 30, 1996, Home Beneficial reported net income over
the last 12 months of $38 million and shareholders' equity of $530 million.
Home Beneficial is the holding company of Home Beneficial Life Insurance
Company, which operates in six Mid Atlantic states and the District of
Columbia through a field force of over 1,000 agents and sales managers.
    American General Corporation is one of the nation's largest diversified
financial services organizations with assets of $64 billion and shareholders'
equity of $5.4 billion.  Headquartered in Houston, it is a leading provider of
retirement services, consumer loans, and life insurance to nine million
households.  American General common stock is listed on the New York, Pacific,
London, and Swiss stock exchanges.

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