* Aim to complete merger next September
* Stock swap to exchange 0.138 FamilyMart share for each UNY share
* UNY shares to be delisted Aug. 29 (Updates with announcement, calculation of deal value)
TOKYO, Oct 15 (Reuters) - FamilyMart Co is buying out smaller rival UNY Group Holdings Co through a share swap deal worth $1.4 billion that would create Japan's second-biggest convenience store operator by sales after Seven & I Holdings Co.
After months of discussions, the companies said on Thursday they had reached a basic agreement to merge in September next year, with 0.138 FamilyMart shares to be exchanged for each UNY share. FamilyMart will be the surviving entity.
Based on the ratio and FamilyMart's closing price Thursday, UNY is valued at 731.4 yen per share, representing a 4.9 percent premium. UNY shares, which ended down 5 percent on Thursday at 697 yen, will be delisted Aug. 29, they said.
FamilyMart, now Japan's third largest convenience store operator, and UNY, owner of fourth-ranked chain Circle K Sunkus, had agreed in March to begin negotiations with the aim of merging in 2016. ($1 = 118.7600 yen) (Reporting by Chris Gallagher and Chang-Ran Kim; Editing by Clarence Fernandez and Miral Fahmy)