German Chancellor Angela Merkel expressed Friday her condolences to French President Francois Hollande and assured him of her solidarity following the attack on a factory in France.

"I am deeply shocked by the reports about an attack of potential terrorist nature on a factory in Saint-Quentin-Fallavier. What has happened recalls terrible memories of the attacks in Paris in January this year," wrote Merkel Friday in her condolence telegram to Hollande.

She extended her sympathies to the French president, and expressed sincere condolences to the relatives of the deceased as well as best wishes to those injured in the attack for their recovery.

The chancellor also assured Hollande solidarity, saying her country "stands firmly on the side of France in the fight against terrorism."

Earlier on Friday, two men stormed a gas company in southeastern France and exploded gas containers. At least two people were wounded. A man was found decapitated at the site, with a flag of Islamic State (IS) aside.

A presumed perpetrator, known to the intelligence services, was arrested shortly after the attack, reported local media. Hollande has returned home from an European Union summit after the suspected Islamist attack.

German Foreign Minister Frank-Walter Steinmeier has also issued a statement following the attack, saying Germany "condemns this act of terror and fanaticism in the strongest possible terms" and "stands united with France in defending our free society against the blind hatred of terror.