Elbit Medical Imaging Announces That Its Subsidiary Elscint Agrees in Principle to Sell Its Nuclear Medicine and Magnetic Resonance Medical Imaging Businesses for $100 Million.

HAIFA, Israel--(BUSINESS WIRE)--Sept. 11, 1998--Elbit Medical Imaging Ltd. (Nasdaq: EMITF) announces that its' subsidiary Elscint Ltd. (NYSE: ELT), has agreed in principle to sell its nuclear medicine and magnetic resonance medical imaging businesses to GE Medical Systems for the gross amount of $100 Million, subject to certain adjustments and before taxes and restructuring costs.

"We are extremely proud of Elscint's teams in nuclear and magnetic resonance medical imaging businesses, and the people who created their success," said Elscint Chairman and Chief Executive Officer, Mr. Emmanuel Gill

"However, in the face of ever increasing global competition, this transaction is a perfect match with General Electric's line of products, and it's worldwide distribution organization."

"Essentially, the transaction provides a broader range of solutions for our customers, creates a greater potential for future development for the nuclear and magnetic resonance medical imaging employees and management, and generates additional value and resources for Elscint's shareholders and management to pursue future business development."

Jeffrey R. Immelt, GE Medical Systems President and Chief Executive Officer, added, "By adding Elscint's nuclear imaging and magnetic resonance imaging products and technologies, this acquisition enables GE Medical Systems to better serve the world's medical caregivers and their patients. We have developed an appreciation for the capabilities of the Elscint organization through our ELGEMS venture, and we are delighted to welcome Elscint's talented people to the GE family"

The transaction calls for GE to acquire all of Elscint's sales and service capabilities for both the its nuclear and magnetic resonance medical imaging businesses and certain design and manufacturing capabilities of the magnetic resonance imaging business. The parties plan to continue their joint venture, ELGEMS, which was formed in 1997 for the design and manufacture of nuclear imaging products. This transaction reaffirms GE's commitment to ELGEMS as its Nuclear Imaging center of excellence and establishes its presence in Israel in MR with design and manufacturing capability. The operations acquired by GE include facilities in Israel, the United States and England.

When the transaction is complete, GE and ELGEMS will have more than 250 medical imaging employees in Israel in the areas of Ultrasound, Nuclear Medicine and MR.

This transaction, which is subject to a definitive agreement, stockholders' approval, governmental regulatory reviews and other contingencies, is planned to close in November.

GE Medical Systems, a business of the General Electric Company, is a $4.5 billion global leader in medical diagnostic imaging systems and services. GE Medical Systems employs nearly 16,000 people worldwide.

Elscint is an advanced medical imaging company serving healthcare professionals worldwide. Guided by the philosophy of applying unique technologies for the advancement of cost-effective healthcare, Elscint designs, manufactures, sells, services and networks a wide range of sophisticated computer-based medical imaging products, including Computerized Tomography (CT), Magnetic Resonance Imaging (MRI), Nuclear Medicine (NM) and Mammography systems.

SOURCE: Elbit Medical Imaging Ltd.

Forward looking statements with respect to the Company's business, financial condition and results of operations, in this release are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements, including, but not limited to, product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development, the effect of the Company's accounting policies as well as certain other risk factors which are detailed from time to time in the Company's SEC filings

CONTACT: Elbit Medical Imaging Ltd.

Company Contact:

Emmanuel Gill, Chairman & CEO, 011-972-8550219

or

Investor Contact:

Oded Tamir, V.P. Finance & CFO, 011-972-8315051