NEW YORK (Reuters) - Invesco Ltd said on Thursday that it has agreed to acquire Guggenheim Investments' exchange-traded funds (ETF) business, which includes $36.7 billion of assets under management as of Aug. 31.

Under terms of the definitive agreement, Invesco, the world's fourth largest ETF manager, will acquire Guggenheim Investments' ETF business for $1.2 billion in cash. The transaction will be funded with a combination of cash and debt. 

With the addition, Invesco's ETF assets under management would total more than $196 billion globally, based on both firms' ETF assets as of Aug. 31.

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"This combination will further strengthen our market share and position by providing greater access to key channels and expanding the scale and relevance of our global ETF business," Dan Draper, global head of ETFs at Invesco said in a statement. 

"The addition builds on our existing self-indexing capability and brings the highly popular BulletShares(®) ETFs, both of which will further strengthen our ability to help clients achieve their investment objectives."

The sale comes as Guggenheim faces questions about its executive leadership, including the fate of its chief executive officer, Mark Walter, as well as clients' questioning recent changes in its sales group. Guggenheim's global chief investment officer, Scott Minerd, earlier this month told Reuters that he is focused on growing the firm, which as of June 30 had $290 billion under management.

Jerry Miller, president of Guggenheim Investments, said in a statement of the agreement with Invesco: "We believe that today's transaction paves the way for future growth by allowing us to sharpen our focus on core strengths including active portfolio management - across both our institutional strategies and in our retail businesses."

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(Reporting by Jennifer Ablan and Trevor Hunnicutt; Editing by Leslie Adler)