Aliko Dangote

Aliko Dangote, Africa’s richest man, has teamed up with two Nigerian states to bid for a majority stake in Peugeot Automobile Nigeria (PAN) Limited, a local joint venture with the French automaker, the governor of Kaduna State said on Thursday.

Governor Nasir El-Rufai said the states of Kaduna and Kebbi, along with development lender Bank of Industry (BoI) and Dangote had submitted bids for the stake which AMCON, Nigeria’s state-backed “bad bank”, is looking to sell.

PAN, the Nigerian assembly plant located in Kaduna State, has Peugeot Citroen PEUP.PA as its technical partner with a capacity to assemble 240 cars a day, PAN said on its website.

“We have submitted bids for the carmaker … with Aliko Dangote on board together with BoI, Kebbi and Kaduna State, we are confident our bid will sail through,” El-Rufai told a conference.

El-Rufai did not provide further details. Bids for AMCON’s stake closed on Jan. 26.

The billionaire tycoon’s Dangote Group is active in cement, oil, food and sugar business, and is also expanding into farming.

Peugeot’s executive vice president for Africa and the Middle-East, Jean-Christophe Quemard, met President Muhammadu Buhari in November to discuss reviving local production. Buhari is keen to promote a “Made in Nigeria” industrial policy.

PAN Nigeria Limited was set up in 1972 as a joint venture between the Nigerian government and France’s Peugeot, with an annual production of 90,000 cars by the 1980s.

But operations nosedived and debt racked up shortly after the government sold its stake to local core investors in 2006, as cheap, imported, second-hand vehicles from Asia and poor manufacturing infrastructure hurt profits.

Asset Management Corporation of Nigeria, the state-owned “bad bank,” owns 79.3 percent of PAN Nigeria Limited, having bought the company’s debt and taken some as equity.

The Nigerian government has been pushing automakers to build cars locally, ordering local car distributors in 2014 to come up with plans for new assembly plants and threatening to impose prohibitive import duties.

Rival automakers, Renault-Nissan, South Korea’s Kia Motors (000270.KS) and Germany’s Volkswagen have announced plans to assemble vehicles in Africa’s biggest economy.

U.S. carmaker Ford Motor Co has partnered with a local car dealer to set up a 5,000 annual capacity assembly plant in Nigeria in November. It plans to produce 10 vehicles a day initially for the domestic market and then develop an export trade across West Africa.