HOUSTON, Feb. 13 /PRNewswire/ -- American General Corporation (NYSE: AGC)
and USLIFE Corporation (NYSE: USH) today jointly announced the signing of a
definitive merger agreement.  The combined companies have assets of
$74 billion and 1996 earnings of $757 million on revenues of $9 billion.
    Under the agreement, USLIFE Corporation shareholders will exchange

each share of USLIFE common stock for $49.00 worth of American General
common stock.  Based upon 36.1 million common equivalent shares of USLIFE
outstanding, USLIFE shareholders will receive aggregate value of
$1.8 billion.  On a pro forma basis, market value of the combined entity
would be in excess of $10 billion.
    In commenting on the transaction, Robert M. Devlin, president and
chief executive officer of American General, said, "This merger represents
the largest transaction in American General's history and is an
outstanding strategic fit which offers a unique opportunity to combine two
of the premier providers of life insurance and financial services in the
nation.  During Gordon Crosby's 38-year career with USLIFE, it has grown
to become one of the nation's leading life insurance-based financial
services organizations.  The combination of these two firms will create
one of the nation's most formidable and competitive providers of financial
services.  We are confident that the shareholders and customers of both
companies will benefit from the merger.  Given the consolidation savings,
we expect this transaction to be non-dilutive from its inception on a pro
forma basis."
    In commenting on the transaction, Gordon E. Crosby, Jr., chairman of
the board and executive committee of USLIFE, said, "This is truly an
outstanding result for both organizations.  American General and USLIFE
Corporation have an excellent cadre of officers and life insurance
marketing professionals which, when combined into a cohesive unit, will
augur well for the future of our shareholders, policyholders, distribution
channels and employees."
    The transaction, which is subject to approval by American General and
USLIFE shareholders, and requisite regulatory approvals, is expected to
close by the end of the second quarter of 1997.  The transaction will be
tax free to USLIFE shareholders and will be accounted for under the
pooling of interests method.
    The exchange ratio for American General common stock will be
determined by dividing $49.00 by an average trading price of American
General common stock prior to closing.  The exchange ratio is subject to a
minimum of 1.09 shares and a maximum of 1.29 shares of American General
common stock for each USLIFE common share.
    USLIFE Corporation is a life insurance-based holding company with more
than $168 billion of life insurance in force and nearly $8 billion in
assets.  USLIFE Corporation operates nationwide through three ordinary
life insurance companies, a credit insurance group, and six other
financial services and support companies.  USLIFE Corporation common stock
is traded on the New York, Pacific, and London stock exchanges.
    Following the merger, American General Corporation will have life
insurance in force of over $300 billion and will serve the financial needs
of 10 million customers through a distribution network of 25,000 sales
representatives.  USLIFE provides American General with financial products
and services that are complementary to those offered by its three business
segments - retirement services, consumer loans, and life insurance.
    The American General Corporation and USLIFE Corporation merger will be
discussed during USLIFE's regularly scheduled 1996 fourth quarter and
preliminary year-end results conference call later this morning.  USLIFE
Corporation's conference call will be held on Thursday, February 13, 1997,
at 10:00 a.m. (EST).  The phone number is 800-553-2197; participants
should plan to dial into the call 10 minutes in advance to ensure smooth
connection.

    American General Corporation is one of the nation's largest
diversified financial services organizations with assets of $66 billion
and shareholders' equity of $5.6 billion.  Headquartered in Houston, it is
a leading provider of retirement services, consumer loans, and life
insurance to nine million customers.  American General common stock
is listed on the New York, Pacific, London, and Swiss stock exchanges.
    Certain information included in this press release is forward looking
and involves risk and uncertainties, including general economic and
competitive conditions that could significantly impact expected results.
Investors are also directed to other risks and uncertainties discussed in
documents filed by the company with the Securities and Exchange
Commission.

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