UPDATE 3-SBI Holdings to absorb SBI E Trade for $1.25 bln

(Adds details, background)

TOKYO Jan 15 (Reuters) - Japanese financial services conglomerate SBI Holdings Inc (8473.T) said it would make online broker SBI E Trade Securities 8701.Q a wholly owned unit in a $1.25 billion stock deal aimed at getting a better grip on its group assets.

SBI Holdings currently owns 52.26 percent of SBI E Trade, Japan's top online broker with about 1.6 million accounts, and also has asset management, banking, investment banking and real estate operations under its umbrella.

The company said buying out minority shareholders would allow it to speed up decision-making and give it greater control over the broker as it moves towards offering its customer base a "one-stop" portfolio of financial services.

Under the deal, SBI Holdings will swap 3.55 of its shares for each SBI E Trade share on Aug. 1, pending the approval of shareholders at a general meeting in late June. SBI E Trade would be delisted from the Jasdaq market on July 28.

Based on SBI Holdings' closing price on Tuesday of 24,830 yen, the ratio would value each SBI E Trade share at 88,147 yen, an 8 percent discount to its closing price of 96,100 yen, and the entire deal at 135 billion yen.

SBI Holdings said it would use roughly 1.1 million of its treasury stock and issue about 4.3 million new shares to finance the deal, diluting existing shareholders by about one-third.

With the benchmark Nikkei share average .N225 at its lowest point in more than two years, commissions are under pressure even though online brokers are already locked in fierce price competition.

Other financial firms have also recently taken steps to tighten their hold on their securities operations.

Mitsubishi UFJ Financial Group (8306.T), Japan's largest bank, has taken a majority stake in online broker kabu.com Securities (8703.T), while No. 2 bank Mizuho Financial Group (8411.T) is planning to merge two brokerage units.

Late last year SBI Holdings tied up with Sumitomo Trust & Banking Co 8403.T to launch an Internet bank, and it has been planning to increase cross-selling of financial products through its portfolio of mainly Internet-based services.

The company said the deal was also in response to growing criticism by Japan's exchanges of the listing of subsidiaries that are closely linked to the parent by both business and capital ties and may lack independence. ($1=108.00 Yen) (Reporting by Nathan Layne, Editing by Hugh Lawson)