The development comes as behemoths like Carrefour -- which at the turn of the century was the world's second-biggest retailer but which has since lost ground to online competitors like Amazon and Costco -- struggle to retain their dominance.
In a statement released in English, supermarket chain Casino said Sunday it had been "has been contacted by Carrefour over the last few days with a view to a possible combination".
It said its board met to discuss the proposal, but that it rejected the bid outright.
Carrefour responded several hours later by issuing a statement that "denies having solicited Casino".
It also said it was "surprised that Casino's board of directors would have been submitted a merger proposal that does not exist", adding that it was considering legal action.