The acquisition is subject to customary approvals and conditions and is expected to complete by the end of May 2011.

Total consideration up to $246m include an initial consideration of $96m payable in cash on completion of the acquisition and $29.9m in new ordinary Ashmore shares, or approximately 5.1 million shares, which will be restricted from sale for a period of up to three years post-completion.

Earn-out consideration of up to a maximum of $120.1m payable in three annual instalments based on the achievement of certain financial targets over the three years following Completion. Earn-out consideration will be payable in a combination of cash and new Ashmore ordinary shares at the prevailing market price, such combination to be determined at Ashmore's discretion.

EMM selling shareholders have agreed to invest $9m into EMM managed funds for a minimum period of three years.

Restructuring of the EMM shareholder structure will result in a reduction in the founders' shareholding and exit of previous shareholder Amundi. All cash consideration will be satisfied from Ashmore's existing cash resources.

The consideration payable at completion may be reduced to recognize redemptions from EMM's existing AuM. Furthermore, Ashmore and EMM have the option not to complete the acquisition should notified redemptions from EMM clients exceed a certain threshold.

Mark Coombs, CEO of Ashmore, said: “This transaction represents an attractive and logical step in Ashmore's broader strategy to grow and develop the Ashmore brand and to further diversify Ashmore's revenue streams. More specifically, it is consistent with our strategy to grow our equity investment theme.

“Together with the rest of the Ashmore team, I am very much looking forward to the prospect of working together with everyone at EMM to better deliver more of the emerging markets investing requirements of our diverse and growing client bases.”

Will the acquisition benefit Ashmore?

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