The likely Daewoo deal would give a ninth brand, joining the 'blue oval', Mazda, Volvo, Lincoln, Mercury, Jaguar, Aston Martin and Land Rover.
A Ford insider said: “We may discover some unpleasant surprises when completing due diligence so we need to be cautious. This is a non-binding bid. We need to look at the numbers and the operational issues over the next six weeks.”
Ford will have the potential of a combined production capacity of 9m units to rival GM as the world's largest vehicle producer. Last year Daewoo sold 945,000 cars worldwide and is needed by Ford in Asia and particularly central and eastern Europe where it lacks competitive products.
A Ford source said: “Because of the move upmarket with Focus we could have done with an Escort substitute in these markets. Within the company, Daewoo is seen as being able to occupy the same kind of territory that Skoda covers for VW.”
David Snyder, Ford executive director of new business development in the Asia Pacific region, considered Daewoo as “the engine for growth of the Ford group in Asia Pacific and eastern Europe”.
GM's defeat comes 11 years after Ford outbid its arch Detroit rival to take control of Jaguar for an inflated £1.6bn.
For 20 years to 1992, GM was involved in joint ventures with Daewoo which restricted its export aspirations. During the mid 1990s, Daewoo gained partial revenge by securing a deal to take over Poland's FSO in competition with GM. Last year GM, involved in initial exclusive talks with Daewoo, came under fire for allegedly letting the once aggressively expansionist carmaker slump into bankruptcy.