LanX++ gave a good algorithm.

I am not sure if this is homework or not? If so, you should tell us.
However, I will give you some actual code.
I process text files frequently - Perl is great at this.
Skipping blank lines in the input is a normal "reflex reaction" by me and I show a common way to do that. 

#!/usr/bin/perl
use warnings;
use strict;
use Inline::Files;

my %File1Hash;

while (my $line = <FILE1>)
{
    next if $line =~ /^\s*$/;  # skip blank lines
    $line =~ s/\s*$//; # remove all trailing space,
                       # including the line ending

    $File1Hash{$line}++;
}

while (my $line = <FILE2>)
{
    next if $line =~ /^\s*$/;  # skip blank lines
   
    my ($id) = split /\|/,$line;  # get the first field
    print $line if exists $File1Hash{$id};
}

=Prints
COA213345|a|b|c|
COA213345|a|b|c|
=cut

__FILE1__
COA213345
COA213345
COA213445
DOB213345
EOA213345

__FILE2__
COA213345|a|b|c|
COA213345|a|b|c|
LOA213345|a|b|c|
kOB213345|a|b|c|
LOA213345|a|b|c|

[download]
Update: I read more of the posts in this thread. If file 1 is 700K lines, this should work just fine on a modern computer. My ancient (now dead) XP laptop would have had some issues with a hash of that size due to memory issues. A modern 64 bit computer won't even blink. If there are issues, there are ways to reduce the memory footprint. Let's not go there unless it is necessary.

In reply to Re: Filtering Output from two files by Marshall
in thread Filtering Output from two files by vighneshmufc

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