UPDATE 1-Siemens to spin off SEN into JV with Gores Group

(Adds detail, background, share price)

MUNICH , July 29 (Reuters) - Siemens AG SIEGn.DE plans to spin off its SEN unit, which it has been trying to sell for two years, into a joint venture with U.S. financial investor The Gores Group, the German engineering group said on Tuesday.

Siemens said it expects to see a significant negative impact in the current quarter due to the transaction and Chief Financial Officer Joe Kaeser said he would not rule out a high triple-digit million euro hit.

SEN, which specialises in communications systems for large corporations, has suffered from the rise of Internet telephony.

The unit has lost more than 1 billion euros ($1.57 billion) over the last two years but a restructuring, including the cutting of up to 6,800 jobs, is already bringing improvements.

SEN will be spun off debt-free, Siemens said, adding that it will hold a 49 percent stake in the joint venture. The transaction is expected to close by end-September.

Gores and Siemens each plan to invest around 175 million euros in the joint venture not including costs for research and development and other expenditures.

On an operational level, business will be driven by Gores, Siemens said.

Siemens stock was down 1.54 percent at 71.35 euros at 1155 GMT, lagging the German blue-chip index DAX .GDAXI, which was down 0.64 percent.

SEN will be combined with two businesses of Gores’s current portfolio companies: Enterasys, a network equipment and security solutions provider, and SER Solutions, a call centre software company, Siemens said.

The SEN unit has been on the block ever since Nokia and Siemens agreed to combine the bulk of their telecom networks businesses in 2006.

Siemens, whose cornerstone was laid when founder Werner von Siemens invented the pointer telegraph more than 160 years ago, has moved away from its roots as telecoms markets have grown more cut-throat in recent years. (Reporting by Jens Hack and Nicola Leske; Editing by Paul Bolding)