(Reuters) -Singapore-based ride hailing firm Grab's deal to buy smaller rival Trans-cab Holdings is likely to significantly lower competition in the domestic market, the city-state's competition watchdog said on Thursday.

Grab is one of Singapore's top ride-hailing firms. The deal is reported to be valued at around S$100 million ($74 million).

The Competition & Consumer Commission of Singapore (CCCS) also said that rival ride-hailing platforms, such as Comfortdelgro Corp , will be deprived of drivers who work for Trans-cab if the deal goes through, especially as the city-state faces a shortage of drivers.

The deal could, therefore, result in fewer choices for passengers and they could also face higher prices, the regulator said, potentially diminishing competition.

The "ruling does not change our determination to do everything that we can to offer affordable, reliable transport options to passengers in Singapore," said Yee Wee Tang, managing director at Grab Singapore.

Trans-cab did not immediately respond to a Reuters request for comment.

The regulator first raised competition concerns in October 2023 after the deal was announced in July.

CCCS has set out a provision for Grab and Trans-cab to offer solutions to address these concerns within ten working days from the release of the statement, before a final regulatory decision on the deal.

($1 = 1.3473 Singapore dollars)

(Reporting by Shivangi Lahiri in Bengaluru; Additional reporting by Sneha Kumar; Editing by Mrigank Dhaniwala)