The Financial Times reported that Numericable-SFR had offered more than €10 billion in cash for Bouygues Telecom.
In a statement, Bouygues said that it believed the telecoms market to be at "the dawn of a new era of growth" as new uses of digital technologies are developed. Bouygues Telecom, is particularly well positioned to take advantage of this growth with its portfolio of frequencies and its 4G network, it said.
The offer also presented significant competition law risks affecting both fixed and mobile markets, and Altice "has not provided a fully satisfactory response regarding this important matter", Bouygues said.
Bouygues had paid attention to the consequences of market consolidation in terms of employment and social risks when making its decision, it said.
"The Bouygues Group has always strived to write an industrial story that created value in the long term with its employees and suppliers, and in the interests of its customers, while respecting its commitments in terms of investment for the development of French infrastructures," it said.
The French government had expressed concern about the potential deal, which would have reduced the number of competitors in the market from four to three. "Now is not the time for opportunistic tie-ups which may be of interest to some people but which are not in the public interest," economy minister Emmanuel Macron told AFP.
European competition commissioner Margrethe Vestager has repeatedly warned that telecom operator mergers are likely to damage competition in the European market.