PETAH TIKVA, Israel -- ECI Telecom Ltd. (NASDAQ: ECIL), a global provider of networking infrastructure equipment, today announced that it has entered into a definitive merger agreement for the Company to be acquired by affiliates of the Swarth Group, an investment vehicle controlled by Shaul Shani, and certain funds that have appointed Ashmore Investment Management Limited as their investment manager ("Ashmore"), a leading emerging markets investment manager, in a transaction valued at approximately $1.2 billion.

Under the terms of the agreement, ECI shareholders will receive $10 per share in cash at closing, representing a premium of approximately 22% over ECI's average closing share price during the 30trading days ended June 15, 2007. The Company confirmed it was in discussions with third parties regarding a possible transaction on June 17, 2007. There is no financing condition to the obligations of the buyers to consummate the transaction.

The Board of Directors of ECI approved the agreement and recommended that ECI shareholders vote in favor of the transaction. The closing of the transaction is subject to shareholder approval, certain regulatory approvals and other customary closing conditions. It is currently anticipated that the transaction will be consummated by the end of the year. Upon the closing of the transaction, ECI ordinary shares would no longer be traded on NASDAQ.

Each of Koor Industries, Clal Industries & Investments and a group led by Carmel Ventures, the owners of an aggregate of approximately 44% of ECI's outstanding ordinary shares, have entered into voting undertakings with the buyers under which they have agreed to vote their shares in favor of the transaction. These undertakings will terminate if the Board of Directors of ECI changes its recommendation in favor of the proposed transaction with the current buyers.

Under the terms of the agreement, ECI may actively solicit alternative proposals from third parties until July 31, 2007 and intends to consider any such proposals with the assistance of its independent advisors. ECI does not intend to disclose developments with respect to this solicitation process unless and until its Board of Directors has made a decision regarding any alternative proposals. ECI advises that there can be no assurance that the solicitation of superior proposals will result in an alternative transaction. In addition, ECI may, at any time, subject to the terms of the merger agreement, respond to unsolicited proposals. If the Company accepts a superior proposal, a break-up fee would be payable by the Company to the buyers.

Shlomo Dovrat, Chairman of the Board of Directors of ECI Telecom, commented on the transaction, "Our focus, as a Board, has always been to maximize long term shareholder value. In the last few years ECI was able to emerge from the Telecom crisis as a vibrant successful company growing its market share in a highly competitive market. At the Board we evaluated our strategy going forward and while excited with the opportunities we also recognized the challenges of continuing the path as an independent public company operating in a competitive and consolidating market. After careful and thorough analysis, and with the completion of extensive negotiations with the buyers, the Board of Directors has decided to endorse this transaction as being in the best interest of our shareholders and recommends that it is approved by the shareholders. We believe that this transaction recognizes the value of ECI's strong market position and innovative solutions, while providing our shareholders with an attractive cash offer. We have high regards for the investor group and are confident ECI will continue to thrive under its new ownership structure."

ECI Telecom Ltd.