6-K

                         -----------------------------


                                    FORM 6-K


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                        REPORT OF FOREIGN PRIVATE ISSUER
                        PURSUANT TO RULE 13a-16 OR 15d-16
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                          For the Month of October 2004

                        Commission File Number 000-50544

                       LIPMAN ELECTRONIC ENGINEERING LTD.
                       ----------------------------------
                 (Translation of registrant's name into English)

             11 Haamal Street, Park Afek, Rosh Haayin 48092, Israel
             ------------------------------------------------------
                    (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.

                      Form 20-F  x          Form 40-F
                                ---                   ---

Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ____

NOTE: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a
Form 6-K if submitted solely to provide an attached annual report to security
holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ____

NOTE: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document that the registrant
foreign private issuer must furnish and make public under the laws of the
jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.

Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

                      Yes                   No  x
                          ---                  ---

If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-____



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         On October 4, 2004, Lipman Electronic Engineering Ltd. issued a press
release announcing the acquisition of Dione Plc.

         A copy of this press release is annexed hereto as Exhibit 1.

         The following document is attached hereto and incorporated by reference
herein:

         Exhibit 1. Press Release, dated October 4, 2004, announcing the
                    acquisition of Dione Plc.

         The information set forth in the first, second and third paragraphs of
the press release attached as Exhibit 1 to this Report are hereby incorporated
by reference into the Registration Statement on Form S-8 (File No. 333-112993)
of Lipman Electronic Engineering Ltd.





                                    SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                              LIPMAN ELECTRONIC ENGINEERING LTD.
                              (Registrant)



                              By: /s/ Mike Lilo
                                  --------------------------------------------
                                  Mike Lilo
                                  Executive Vice President, Finance and Chief
                                  Financial Officer



Dated: October 5, 2004






                                  EXHIBIT INDEX

Exhibit No.       Description
- -----------       -----------

    1.            Press Release, dated October 4, 2004, announcing the
                  acquisition of Dione Plc.

EX-99.1

                                                                       Exhibit 1

[LIPMAN TRANSACTION SOLUTIONS LOGO]



FOR FURTHER INFORMATION CONTACT
- -------------------------------

ISRAEL:                                         UNITED STATES:
Maya Lustig                                     Jeff Corbin/Lee Roth
Investor Relations & Public Relations Manager   KCSA Worldwide
Lipman Electronic Engineering Ltd.              800 Second Ave.
11 Haamal Street, Park Afek                     New York, NY 10017
Rosh Haayin 48092, Israel                       (212) 896-1214/(212) 896-1209
972-3-902-8603                                  jcorbin@kcsa.com/lroth@kcsa.com
maya_l@lipman.co.il                             -------------------------------
- -------------------

                           LIPMAN ACQUIRES DIONE PLC

                                      ---

         Combination To Strengthen Leadership Position in the Worldwide
                          Transaction Solutions Market

Rosh Haayin, Israel, October 4, 2004 - Lipman Electronic Engineering Ltd.
(Nasdaq, TASE: LPMA) and privately-held Dione Plc jointly announced today that
Lipman has purchased 100% of the share capital of Dione from its shareholders,
Tamares Capital Foundation, GE Equity and others.

Under the terms of the agreement, Lipman paid $69 million in cash for all of the
outstanding shares of Dione. In addition, Lipman is required to pay an
additional purchase price of up to $33.4 million, contingent upon Dione meeting
certain financial targets in 2005 and 2006. If financial targets are met in
2006, Lipman will also issue up to a maximum of 442,105 of its ordinary shares
to shareholders of Dione. Dione's management estimates that Dione's revenues for
the nine months ended September 30, 2004 were approximately $46 million. It is
anticipated that this acquisition will be accretive to Lipman's earnings by the
end of the first year following the closing of the transaction.

Dione is a fast growing supplier of smart card-based payment systems with
applications and managed services that help merchants improve margins and
customer satisfaction. Dione believes it is one of the main suppliers in the
smart card-based payment system market in the United Kingdom, and believes it is
one of the top ten global providers of electronic solutions worldwide.





                                       1



Isaac Angel, President and Chief Executive Officer of Lipman said, "The Dione
transaction significantly supports our long-term strategy of profitable growth
and global leadership. As we have stated previously, a key element of Lipman's
growth strategy is to seek synergistic acquisition opportunities in order to
provide entrance into markets where Lipman is not already established. Dione is
expected to represent an excellent fit, with its solid management team,
expanding customer base and strong market presence. We believe the combination
of the Dione and Lipman businesses will enable us to continue expanding our
suite of offerings and penetrate additional new markets. Dione is expected to
provide Lipman with important new customer relationships that would add critical
mass to our United Kingdom presence. It also will provide us with an immediate
presence in the South African and Finnish markets, as well as the means by which
to establish more easily a presence in other European markets."

Mr. Angel continued, "We believe that Dione will serve as another engine for
Lipman's continued growth. We intend to leverage the operational and
technological synergies that exist between our companies and to take full
advantage of the opportunities that arise, both directly and indirectly, as a
result of this transaction. Given the complementary nature of our respective
business models, our customer-centric approach and belief in providing
unparalleled service and support, viewing each customer as a partner, we believe
that this transition will be extremely smooth. We are impressed by Dione's
management team and employees, who will remain in place. This transaction
presents the shareholders, customers and employees of both companies with new
horizons and enhanced opportunities."

Shaun Gray, Chief Executive of Dione said, "We are extremely pleased to be
joining forces with Lipman. We believe that our existing suite of products
complements Lipman's NURIT family of POS terminals, and represents a significant
growth opportunity for the combined company. Lipman's products will gain from
our strong, established presence and complementary customer base and our
products will benefit from increased exposure through Lipman's global sales and
marketing channels. I believe that our numerous multi-national partners and
clients will benefit immediately from our broader geographic coverage and new
suite of products. Together, the combined Lipman/Dione organizations can provide
our customers with significant added value, enabling us to further grow and
expand our presence in the worldwide electronic transaction solutions market."

WEBCAST INFORMATION

Lipman and Dione will host a conference call and live webcast on Monday, October
4, 2004 at 10:00 a.m. Eastern Time (4:00 p.m. Israel time, 3:00 p.m. UK time) to
discuss the acquisition. A question and answer session will follow this
discussion.

Investors and other interested parties are invited to listen to the call via a
live webcast through Lipman's web site at http://www.lipman.co.il/ Please log in
at least 10 minutes prior to the conference call in order to download the
applicable audio software. Following the conclusion of the call, a replay of the
webcast will be available within 24 hours at the company's web site.






ABOUT LIPMAN

Lipman is a leading worldwide provider of electronic payment systems. Lipman
develops, manufactures and markets a variety of handheld, wireless and landline
POS terminals, electronic cash registers, retail ATM units, PIN pads and smart
card readers, all under the NURIT(R) brand name. In addition, Lipman develops
technologically advanced software platforms that offer comprehensive and
customized transaction processing solutions for its customers.

Lipman's corporate headquarters and R&D facilities are located in Israel. Lipman
also maintains offices in the US, Turkey, China, Spain, Russia, Italy, Canada
and Latin America.

ABOUT DIONE

Dione specializes in the design, development and provision of card transaction
terminals supporting payment and value-added applications for retailers,
including integrated pin and smart card ("Chip & Pin") solutions, standalone
terminals for deployment at SME's, wireless terminals for the portable/mobile
sectors and secure solutions for unattended payment. Dione also specializes in
the provision of managed professional services such as on-site and call-center
support with remote terminal management.

With a focus on research, innovation and service, Dione provides both generic
and client specific, cost effective solutions to its customers and is a fast
growing supplier of smart card-based payment systems, operating internationally.

Statements concerning Lipman's business outlook or future economic performance;
product introductions and plans and objectives related thereto; and statements
concerning assumptions made or expectations as to any future events, conditions,
performance or other matters, are "forward-looking statements" as that term is
defined under U.S. Federal securities laws. Forward-looking statements are
subject to various risks, uncertainties and other factors that could cause
actual results to differ materially from those stated in such statements. These
risks, uncertainties and factors include, but are not limited to: our dependence
on distributors and customers; the competitive market for our products; market
acceptance of new products and continuing products; timely product and
technology development/upgrades and the ability to manage changing market
conditions; manufacturing in Israel; compliance with industry and government
standards and regulations; dependence on key personnel; possible business
disruption from acquisitions; and other factors detailed in Lipman's filings
with the U.S. Securities and Exchange Commission. Lipman assumes no obligation
to update the information in this release.