Siemens Selling Assembly Systems Business To ASM Pacific Technology

Siemens AG (SI, SIE.XE) said Thursday it is selling its assembly systems business to ASM Pacific Technology Ltd. (0522.HK), a unit of Dutch semiconductor equipment maker ASM International NV (ASM.AE, ASMI).

Under the terms of deal, Siemens will pay EUR29 million to ASM Pacific Technology. In exchange, ASM Pacific Technology will support the loss-making business with guarantees, revolving credit lines and loans totaling EUR160 million, according to a filing to the Hong Kong Stock Exchange.

Siemens put its assembly systems business for sale in 2008 and has so far eliminated 900 jobs.

Currently, Siemens Electronics Assembly Systems, or SEAS, has 1,200 employees, among them 630 in Munich, where the German industrial conglomerate is headquartered.

ASM Pacific Technology will integrate SEAS as a separate unit and has also made extensive pledges regarding business locations and workforce, Siemens said in a statement.

Munich remains the central location for production, testing and research at SEAS.

Over the long term ASM International intends to concentrate all of its European research activities in Munich, Siemens also said.

In Siemens' fiscal year 2009, which ended Sept. 30, SEAS posted an after-tax loss of EUR151.7 million on sales of EUR190.7 million.

Still, a Siemens spokesman added, the unit's performance has improved recently. SEAS' net loss shrank to EUR4 million in the quarter ended June 30 and totaled EUR25 million in the nine months to the end of June.

-By Archibald Preuschat and Matthias Karpstein, Dow Jones Newswires; [phone]; [e-mail]