AMERICAN
FINANCIAL GROUP, INC.                                               NEWS RELEASE
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Date:          December 2, 1997               Contact:      Anne N. Watson

For Release:    Immediately                   Phone: (513) 579-6652
                                              Web Site:     http://www.amfnl.com


                          AMERICAN FINANCIAL GROUP AND
                          SUBSIDIARIES APPROVE PLANS TO
                          SIMPLIFY CORPORATE STRUCTURE


 (Cincinnati,  Ohio) American  Financial Group, Inc. (NYSE: AFG) announced today
that  shareholders  of  AFG  and  two of its  subsidiaries,  American  Financial
Corporation  ("AFC") and American  Financial  Enterprises,  Inc.  ("AFEI") voted
overwhelmingly to approve their respective mergers,  which were completed today.
The mergers are  expected to reduce  AFG's  corporate  expenses and simplify the
public company structure of certain subsidiaries.

 AFG  shareholders  approved the formation of a new holding company which is now
the  parent  entity of all of AFG's  subsidiaries.  More than 99% of the  shares
voting on the matter  voted to approve the AFG  reorganization.  The new holding
company has changed its name to American  Financial Group, Inc. and its stock is
trading on the NYSE under the "AFG" symbol.  AFG  shareholders  will NOT have to
exchange certificates or take any further action.

AFEI Transaction

 AFG now owns 100% of the outstanding stock of AFEI;  formerly,  it owned 81% of
AFEI's common stock with public  shareholders owning the remainder (2.77 million
shares).  Holders of over 98% of AFEI's shares voted to approve the merger. AFEI
shareholders  had the option to receive AFG common stock on a one-for-one  basis
or $37.00 per share in cash.  AFG expects to issue shares of AFG common stock in
exchange for almost 90% of the AFEI common stock.

AFC Transaction

 AFC  merged  with a  wholly-owned  subsidiary  and  holders of its Series F and
Series G  Preferred  Stock are  entitled  to  receive  cash or, at the  holders'
elections,  a new series of AFC Series J Preferred  Stock.  The  transaction was
approved  by  holders of  approximately  95% of the Series F and Series G shares
voted on the matter. Holders of Series F Preferred Stock will receive $24.78 per
share in cash or Series J Preferred  Stock plus an accrued  dividend of $.15 per
share; holders of Series G Preferred Stock will receive $10.50 per share plus an
accrued dividend of $.26 per share. AFC will pay approximately  $250 million and
issue approximately 2.8 million shares of its Series J Preferred Stock to former
holders of Series F and Series G Preferred Stock. Series J Preferred Stock has a
liquidation  value of $25.00 per share and will pay an annual  dividend of $2.00
per share beginning May 1, 1998.







 American  Financial  Group is engaged  primarily  in specialty  and  multi-line
property  and  casualty  insurance  businesses  and in the sale of  tax-deferred
annuities and certain life and health insurance products.