Auchan Holding SA is exploring a fresh attempt at a takeover of domestic rival Carrefour SA (ENXTPA:CA), people with knowledge of the matter said. Auchan has revived work on a potential deal for Carrefour after earlier negotiations collapsed in the autumn, the people said, asking not to be identified because the discussions are private. It has held talks with private equity firms about teaming up on a bid, according to the people.

A combination with Carrefour would help Auchan's founding Mulliez family create the biggest grocer in France and strengthen its position amid challenges from low-priced German rivals. Any deal would need the backing of Carrefour's anchor shareholders, the Moulin family and Brazilian retail tycoon Abilio Diniz. Deliberations are ongoing, and there's no certainty they will lead to an offer, the people said.

Representatives for Auchan and Carrefour declined to comment.