Koor Industries Ltd. ("the Company") hereby reports that on 27 June, 2010, Makhteshim Agan, an affiliate of the Company in which the Company holds approximately 44.08% of the capital and 47.03% of the voting rights, published an immediate report in which it provided the following information:

On 27 June, 2010, the board of directors of Makhteshim Agan approved Makhteshim Agan's engagement in a memorandum of understanding whereby, subject to due diligence, to the consent to and signing of a binding agreement between the parties and the fulfillment of  conditions precedent for closing the transaction as these are determined in the binding agreement, Makhteshim Agan will acquire the entire issued share capital of a private company incorporated in the U.S. ("the Acquired Company") from its sole shareholder ("the Seller").

To the best of Makhteshim Agan's knowledge, the Acquired Company is the largest manufacturer of generic agrochemical products in North and South America. It sells its products in about 50 countries worldwide, and has a significant market share.

Under the terms of the memorandum of understanding, in consideration of acquisition of the entire issued share capital of the Acquired Company, including all its assets and liabilities, where on the date of closing the transaction the net financial debt of the Acquired Company will not exceed USD 280 million, Makhteshim Agan will pay the Seller USD 340 million in cash on the date of closing the transaction, plus another USD 455 million to be paid in seven equal annual interest-bearing installments. In addition, the Seller will be allocated 59 million shares in Makhteshim Agan, which will account for approximately 12% of the issued and paid up share capital of Makhteshim Agan at full dilution.

Makhteshim Agan believes, subject to completion of the due diligence process to Makhteshim Agan's satisfaction, the parties' entering into a binding agreement and fulfillment of the conditions precedent for making the transaction as determined in that agreement, that the transaction can be expected to be closed before the end of 2010. However, Makhteshim Agan clarified that at this stage, it is unable to state categorically that a binding agreement will be signed between the parties, or that the transaction will indeed be made.

The accounting effects of the transaction on the financial statements of the Company  will be determined on the basis of various data that are currently unknown, among them the price at which Makhteshim Agan's shares will be trading on the stock exchange and its equity on the date of closing the transaction. Based on such relevant data as known on the date of this report, the Company can expect, as a result of the transaction if it is closed on the terms noted above, to record a loss that it estimates at this stage at approximately NIS 44 million. It is clarified that this sum is a preliminary estimate subject to changes in the relevant data up to the date of closing the transaction, as explained above. It is noted that the Company is examining its accounting treatment of the transaction, and at this stage the results and scope of that examination are uncertain.