Europe’s largest engineering company, Siemens AG, announced that it’s selling its electronics assembly systems division to a subsidiary of Dutch semiconductor equipment manufacturer ASM International NV.

The electronics assembly systems unit, which consists of 1,200 employees, is one of the world’s largest suppliers of surface assembly systems for the electronics industry. But according to a statement from the Munich-based company, it is no longer a core business for Siemens.

Hong Kong-based ASM Pacific Technologies Ltd. will pay 1 euro for the unit while Siemens will be required to provide 29 million euros as a “non-refundable cash-payment,” according to a filing to the Hong Kong stock exchange.

ASM Pacific says it will expand its product portfolio by breaking into surface mount technology equipment.

ASM Pacific also added that it will integrate the electronics assembly business into the company as a separate unit and has also agreed that Munich, Germany, is to remain the central location for production, testing and research.

Siemens Electronics Assembly Systems had 190.7 million euros in sales for the fiscal year ending Sept. 30, 2009, and a net loss of 151.7 million euros, according ASM Pacific Technologies’ statement.