Updated 9:50 a.m. Eastern.

WASHINGTON — Northrop Grumman will acquire Orbital ATK in a $9.2 billion deal announced Sept. 18 that will give the combined company complementary capabilities in space and defense systems.

Under the terms of the deal, Northrop Grumman will pay $7.8 billion in cash and assume $1.4 billion in debt to acquire Orbital ATK. Northrop Grumman is paying $134.50 per share of Orbital ATK stock, a premium of more than 20 percent over the stock’s price of $110 per share at the close of trading Sept. 15. News of the deal was first reported Sept. 17 by the Wall Street Journal.

The companies, in a statement announcing the deal and subsequent conference call with financial analysts, described Northrop’s acquisition of Orbital as a complementary one. Orbital ATK will operate as a fourth division of Northrop Grumman, alongside aerospace systems, mission systems and technology services.

“Our two companies represent a very complementary fit,” Wes Bush, chairman and chief executive of Northrop Grumman, said on the call. “We have very little overlap.”

The acquisition “reflects the tremendous value that Orbital ATK has created for our customers, our shareholders and our employees,” said David Thompson, president and chief executive of Orbital ATK, on the call. The deal will allow Orbital ATK to pursue “new opportunities that require greater technical and financial resources than we currently possess.”

An Orbital ATK investor presentation released by the company also emphasized the complementary nature of the deal. It noted that Orbital ATK has expertise in launch vehicles, smaller satellites, propulsion systems and some military programs that Northrop Grumman lacks. Northrop, by comparison, has capabilities in other areas, including larger satellites, that Orbital ATK does not have.

The acquisition by Northrop Grumman would give Orbital ATK greater technical and financial resources to pursue larger programs, the presentation noted. That includes ongoing efforts by Orbital to develop a satellite servicing system as well as a proposed large launch vehicle.

Bush, in the call, emphasized military space systems as one area that will benefit from the acquisition, leveraging Northrop’s experience with large satellites with Orbital’s work on smaller spacecraft. “We can no longer treat space as a permissive environment,” he said, “and it will take a mix of large and small space systems to create both the capability and the resiliency we need to operate in this environment.”

The announcement made no mention of consolidations typical with such deals, such as the closure of redundant facilities or layoffs of employees. Ken Bedingfield, Northrop Grumman’s chief financial officer, said the company expected to achieve $150 million in annual cost savings by 2015 through various consolidation efforts, including “organizational alignment.”

Thompson said that Orbital ATK started discussions earlier this year with Northrop Grumman that led to the deal. “We were not shopping the company,” he said, adding there were no other bids to acquire Orbital. “This was not part of a competitive process.”

Orbital ATK will initially be a separate division of Northrop Grumman, which Bush said is the best way to allow Orbital to continue its operations and serve its current customers. He added, though, that Northrop has, from time to time, performed corporate realignments, and suggested that at some point in the future Orbital ATK’s various elements could be incorporated elsewhere in the company. “We have not established any timeline for looking at things differently,” he said.

“Our focus has been on making certain that, during the transition period and beyond, we don’t miss a beat in terms of operational performance for our customers,” Thompson said.

Thompson was vague, though, about his future with the company. “We have not made any final decisions on sector leadership,” he said. “But, like our other senior corporate executives, I am very supportive of this transaction and will be available to support Wes and his team as we move forward.”

The companies expect the deal to close in the first half of 2018 after approval by Orbital ATK shareholders and regulatory reviews.

Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. He earned a Ph.D. in planetary sciences from the Massachusetts Institute of Technology and a bachelor’s degree with honors in geophysics and planetary science...