Engineering and technology major Siemens is selling its IT unit Solutions and Services (SIS) to France's Atos Origin for €850 million, the German conglomerate said yesterday.

"We are creating a European Champion," Siemens CEO Peter Loescher said.

In a statement, Siemens said the deal would have a "considerable negative earnings impact" in Siemens' fiscal 2011.

It added that the deal was structured to be short-term accretive on the earnings per share for Atos Origin.

According to analysts, the deal caps the largest European engineering company's efforts to spin off its money-losing IT unit and clears the way for Atos Origin to scale up to global size.

With the deal, Atos Origin would step into the major league as a cloud computing player, which, according to Siemens, would be a major driver of growth in the future.