UPDATE 1-LATAM Airlines chooses oneworld air travel alliance

* Chile's LAN and Brazil's TAM formed LATAM last year

* Regulator asked merged company to pick airline alliance

* LAN already part of oneworld, TAM to exit Star Alliance

SANTIAGO, March 7 (Reuters) - Newly merged LATAM Airlines Group has chosen to join the oneworld airline travel alliance, the carrier said on Thursday.

Chile's LAN, already a member of oneworld, completed a takeover of Brazil's TAM last year, creating Latin America's biggest airline.

TAM will leave Star Alliance, the other global alliance, during the second quarter of next year, shaking up international air travel in Brazil ahead of the 2014 soccer World Cup and the 2016 Olympics.

Chile's regulator had imposed a series of conditions on the merger, including renouncing participation in one of the two global alliances.

"In the view of LATAM's board, this global alliance is the most adequate for the interests of the company and has the most synergies for LATAM Airlines Group, and also offers the best benefits, most connection and products to our passengers," the airline said in a statement to Chile's regulator.

The airline, based in Chilean capital Santiago, operates in Argentina, Brazil, Colombia, Chile, Ecuador and Peru.