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UPDATE 1-Uber to buy Chile's Cornershop in bid to deliver your groceries

Dave Sherwood and Aislinn Laing

(Adding tweet from Cornershop, background on Uber, Cornershop, more details of deal timeline)

SANTIAGO, Oct 11 (Reuters) - Uber said on Friday it would buy a majority stake in online grocery provider Cornershop as the ride-hailing giant moves to expand its fast-growing delivery service into the grocery store market.

Santiago-based Cornershop operates in Mexico, Chile, Canada and Peru, but Chief Executive Oskar Hjertonsson said the deal would allow it to deliver groceries "in many more countries around the world."

He retweeted the news of the deal as it broke, adding: "This will be fun!"

The app provides delivery of "groceries to your front door in one hour" from retailers including Costco Wholesale Corp , Walmart Inc and Mexico's Chedraui . It charges retail chains and customers a commission for its services.

Whether its getting a ride, ordering food from your favorite restaurant, or soon, getting groceries delivered, we want Uber to be the operating system for your everyday life, Uber CEO Dara Khosrowshahi said in a statement.

No valuation was disclosed for the deal. Uber said it expected to close the deal in early 2020, "subject to regulatory approval."

Mexican antitrust officials earlier this year blocked a $225 million bid by Walmart to buy Cornershop, citing concerns the retail giant could not guarantee a level playing field for rival retailers.

Cornershop would continue to operate under its current leadership, which would report to a board with majority Uber representation, Uber said in a statement.

Cornershop has rapidly gained popularity in local markets, including Chile, where its shoppers are a common sight scrambling down the aisles of grocery stores as they hunt down orders for customers.

The company has also diversified rapidly, moving from food to stores selling clothes, toys, home decor, books, electronic goods and pharmaceutical products.

The news of the deal comes amid a flurry of similar announcements from Uber, as it seeks to expand beyond its core taxi app.

This week it launched a boat service in Nigeria's populous Lagos, expanded a helicopter taxi service in New York's JFK airport and began an app in Chicago to connect workers with businesses needing to fill available shifts.

The move to diversify comes at a time when Uber's main ride hailing operations face competition in Asia, while the U.S. company is also facing regulatory scrutiny for classifying its drivers as independent contractors.

In Chile, Uber remains technically illegal, with a bill to regulate ride-sharing digital applications making its way slowly through Chile's congress amid challenges from traditional taxi firms and drivers' unions, which want tighter labor regulations.

(Reporting by Dave Sherwood and Aislinn Laing; Editing by Steve Orlofsky)