The long-term alliance would cover the purchase of food products from national brands as well as the purchase of non-food products, Auchan and Intermarche said in a joint statement.

Casino said last week it has received 'preliminary indicative offers from several purchasers' for an unspecified number of hypermarket and supermarkets it had put up for sale.

Intermarche had already agreed to buy about 61 stores from Casino in May. It has a call option, exercisable within three years, for a second group of 72 stores.

A source close to the matter told Reuters on Tuesday that at this stage "most players on the French retail market", including Leclerc, had expressed interest in the sale process.

Potential candidates for Casino's stores also include German discount group Lidl.

"The idea is to try to have something done in 2023," the source said of the timetable for bids.

Last week, Auchan Retail board member Serge Papin told BFM Business that Auchan and Intermarche had submitted a joint bid for all the stores Casino is looking to sell to raise cash.

The sale of the hyper and supermarkets, if completed, would sharply reduce Casino's size to some 8 billion euros in sales from 33.6 billion euros in 2022, halving its market share in France to around 3%, Barclays analyst Nicolas Champ estimates.

(Reporting by Dominique Vidalon; Editing by GV De Clercq and Alexander Smith)

By Dominique Vidalon