HOUSTON, Sept. 12 /PRNewswire/ -- American General Corporation (NYSE: AGC)
and Western National Corporation (NYSE: WNH) today jointly announced a
definitive agreement under which American General will acquire the remaining
55% of the common stock of Western National for a total consideration
consisting of cash and American General common stock valued at approximately
$1.2 billion or $29.75 per share.  American General currently owns 45% of the
common stock of Western National.
    The transaction has been approved by the boards of directors of both
American General and Western National, and by a special committee of Western
National's board of directors.  The transaction, which is subject to approval
by Western National's shareholders and requisite regulatory authorities, will
be taxable to Western National shareholders and is expected to close in early
1998.
    In commenting on the transaction, Robert M. Devlin, chairman and chief
executive officer of American General, said, "We are excited about the
addition of Western National and the opportunities for growth that this
combination creates.  As the nation's number one provider of fixed annuities
through financial institutions, Western National expands our presence in one
of the fastest growing segments of the financial services industry.  With
Western National, American General establishes a leading position as the
nation's third largest writer of individual annuities.
    "We are also pleased that Michael J. Poulos, chairman, president, and
chief executive officer of Western National, has accepted our invitation to
join American General's board of directors upon completion of this
transaction.  Mike's 40 years of outstanding leadership in the financial
services industry and success in building Western National will be invaluable
to our company going forward.
    "Western National, as a leading provider of non-qualified annuities, will
complement the leadership position in tax-qualified annuities held by VALIC,
our retirement services company.  This acquisition is an important component
of American General's strategy of providing products that meet the retirement
savings, wealth accumulation, and wealth preservation needs of our broad
customer base.  Additionally, the transaction will significantly expand our
capacity to distribute products and services through financial institutions.
    "This acquisition is expected to be accretive to earnings per share during
the first year, and will improve American General's competitive position while
enhancing our opportunities for growth in revenue and profitability over the
long term."
    Michael J. Poulos, chairman, president, and chief executive officer of
Western National, in commenting on the proposed merger, said, "This
transaction closes one big chapter in our corporate history, but opens yet a
bigger one.  Since Western National went public in 1994 at $12 per share,
we've grown to become the number one provider in our primary market, with
sales more than tripling to an annualized level of more than $2 billion.  Our
successful development of a proprietary annuity product targeted to financial
institutions elevated Western National to this leading position.  We're proud
of the progress made in these past four years, and look forward with
enthusiasm to becoming part of American General -- one of the nation's premier
financial services companies.
    "With respect to the future, we believe that becoming part of American
General will enable Western National to achieve its full potential through
superior ratings, access to broader markets, and a greater range of financial
flexibility."
    Western National shareholders will receive a combination of cash and
American General common stock in exchange for their shares.  Western National
shareholders may elect cash or American General common stock, with cash and
common stock elections each limited to 50% of the aggregate consideration.
The exchange ratio for American General common stock will be determined by
dividing $29.75 by an average trading price of American General common stock
prior to closing, subject to a 6% collar above and below $50.00 per share for
American General common stock.  Outside of the collars, the value of the
transaction would vary, subject to a maximum value of $31.71 per Western
National share at American General share prices of $60.00 and above, and a
minimum value of $27.53 per share for Western National at American General
share prices at $40.00 and below.  In addition, the agreement contains
provisions equalizing the per share cash and stock considerations.
    Upon completion of the transaction, Western National will become part of
American General's retirement services segment.  On a combined basis, American
General will be the nation's third largest writer of individual annuities with
pro forma 1996 annuity sales of $4.9 billion.  The Western National
transaction will mark American General's third life insurance company
acquisition during 1997 for a total consideration of $3.7 billion.
    In December 1994, American General acquired 25 million or 40% of Western
National's common stock for $274 million or $11 per share.  American General
increased its ownership interest in Western National to 46% with the September
1996 purchase of 7.25 million shares of convertible preferred stock for
$130 million or $17.92 per common equivalent share.  The preferred stock was
subsequently converted to Western National common stock.
    Founded in 1944 and headquartered in Houston, Texas, Western National
Corporation is a leading provider of retirement annuity products.  The company
has assets of more than $11 billion and annuities in force of over $9 billion.
As of June 30, 1997, Western National reported operating earnings over the
last 12 months of $112 million and shareholders' equity of $970 million.
Western National is the parent company of Western National Life Insurance
Company, one of the largest life insurance companies in the United States.
    American General Corporation is one of the nation's largest diversified
financial services organizations with assets of $77 billion and shareholders'
equity of $6.7 billion.  Headquartered in Houston, it is a leading provider of
retirement services, life insurance, and consumer loans to 12 million
customers.  American General common stock is listed on the New York, Pacific,
London, and Swiss stock exchanges.

                               IMPORTANT NOTICE

    American General will host a conference call to discuss the definitive
agreement to acquire Western National today, Friday, September 12, 1997, at
9:30 a.m. (EDT).  The conference call is restricted to members of the
financial community.  The phone number is 800-399-4414; participants should
plan to dial 10 minutes in advance of the call to ensure smooth connection.
A rebroadcast of the call may be accessed by dialing 800-642-1687, reservation
number 615008.

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