1. Further to the previous reports of Koor Industries Ltd. ("the Company") concerning the merger agreement to which the parties are the Company, Discount Investments Ltd. (the controlling shareholder in the Company) ("DIC") and DIC Merger 2013 Ltd. ("DIC Merger 2013"), which is a private special purpose company wholly owned by DIC ("the Merger Agreement", "the Merger Transaction", respectively), including the updated transaction report to the general meeting of the shareholders of the Company dated September 10, 2013 (Ref. 2013-01-142278) ("the Transaction Report") and the Company's immediate report on February 27, 2014 (Ref. 2014-01-000486) on preparations for closing the Merger Transaction, the Company hereby reports that the Merger transaction was closed today.

2. As part of closing the transaction, the Company received today, March 2, 2014, a certificate of merger from the Registrar of Companies in accordance with section 323 of the Company Law, 1999 ("the Companies Law") for a merger between the Company and DIC Merger 2013, and upon publication of this immediate report on receipt of the merger certificate ("the Closing Date"), the merger comes into force as described in section 2.1.2 of the Transaction Report.

3. Under the Merger Agreement, the value of Koor (after applying the adjustment mechanism described in section 2.2.2 of the Transaction Report) by which the per share consideration of the merger was determined, amounts to NIS 2,489,339,731. In addition, pre the Merger Agreement, the consideration of the merger bears annual interest of 1% calculated proportionately in respect of the period between February2, 2014 and the Closing Date.

4. As a result, based on section 3 above, every Eligible Shareholder as defined n section 1.2 of the Transaction Report, who holds Company shares on the Closing Date, is entitled to receive from the Company NIS 73.5909 (gross, before tax withholding), in cash, for each share of the Company it holds on the Closing Date.

5. The merger consideration for Eligible Shareholders who hold their shares through the Nominees Company of Bank Hapoalim Ltd. and those shares are registered in their favor with members of the TASE ("the Unregistered Eligible Shareholders"), will be transferred a short time after the Closing Date to the Nominees Company of Bank Hapoalim and will be paid to the Unregistered Eligible Shareholders through the TASE clearing house and the relevant stock exchange members, in accordance with TASE and clearing house rules. For additional details about the manner of payment of the consideration to the Eligible Shareholders (including the registered Eligible Shareholders) and the tax withholding, see sections 2.2.10 and 2.2.11 of the Transaction Report.

6. It is noted that with the closing of the Merger Transaction, the precondition required for making full early redemption of the Debentures (Series H), the Debentures (Series I).and the Debentures (Series J) of the Company, which will be implemented on March 17, 2014, was met, and as coordinated with the TASE, the last date for trading in the Company's debentures is March 2, 2014, all as described in immediate reports of the Company on February 27, 2914 (Refs. 2014-01-000489, 2014-01-000492 and 2014-01-000495).

7. It is further noted that under the settlement agreement signed in connection with the Merger Transaction and approved by the court in January 2014 ("the Settlement Agreement"), DIC undertook to offer to the members of the group in the Settlement Agreement ("the Group Members") rights by virtue of the supplementary arrangement ("the Rights Offered by DIC"). For more details about this matter, see the Company's reports on November 22, 2913 (Ref. 2013-01-199788) and January 22, 2014 (Ref. 2014-01-021625). With the closing of the Merger Transaction, all the preconditions to the Settlement Agreement have been met. DIC has informed the Company, following the amendment to the shelf prospectus of DIC from February 2014 for the proposed Rights Offered by DIC, DIC intends to publish, within a few days, a shelf offering report in which the Rights Offered by DIC will be offered to the Group Members. DIC also informed the Company that when submitting applications in connection with the Rights Offered by DIC, the Group members will be required to attach to their applications confirmation of their ownership of Company shares as of the Closing Date of the Merger Transaction.

8. With the closing of the Merger Transaction, the Company becomes a private company wholly (100%) owned and controlled by DIC. The Company's shares will be delisted from the TASE on a date that will be publicized by the TASE, but the Company will continue to be a "bond-issuing company" as this term is defined in the Companies Law and a "reporting company" as this term is defined in the Securities Law, 1968, until the date of the full early redemption of its debentures (see section 5 above).


Namely, the Company's shareholders on the Closing Date of the Merger Transaction, excluding DIC and IDB Development Ltd., the controlling shareholder in DIC.
On this matter, see the Company's immediate report of February 13, 2014, Ref. 2014-01-039298.

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