French phone and Internet provider Bouygues is rejecting a takeover bid by rival SFR, amid French government opposition to the deal.

Bouygues said in a statement late Tuesday that its board decided at a meeting Tuesday "not to follow up" on the unsolicited offer by SFR's owner Altice.

Bouygues argued that its growth forecasts are good and warned that such a deal could run regulatory risks and lead to layoffs. SFR and Bouygues are France's 2nd and 4th largest mobile operators, and the government expressed concern that a merger could reduce competition and cost jobs.

The bid reflects a shift toward consolidation in the European telecommunications sector in recent years and Altice's growing appetite after acquisitions in several countries.