GeoEye Inc. (NASDAQ: GEOY) has offered to acquire DigitalGlobe for approximately $792.7 million in cash and stock, or $17 per share.

GeoEye CEO Matt O’Connell said in a Friday release that a combined company is better positioned to provide the government with geospatial intelligence and satellite imagery during an era of reduced budgets.

DigitalGlobe said in a Friday announcement that its board of directors will “carefully review” and consider the proposal.

Recently, GeoEye’s share price was up nearly 6 percent from Thursday’s closing price of $24.03, while DigitalGlobe’s share price was up nearly 18 percent at $16.01.

DigitalGlobe shareholders would receive $8.50 per share in cash and $8.50 per share in GeoEye stock, a 26% premium on DigitalGlobe’s Thursday closing price.

The transaction is subject to approval from the U.S. government and both companies’ sets of shareholders.

In a released letter to DigitalGlobe CEO Jeffrey Tarr, O’Connell said GeoEye’s board of directors could consider increasing the cash portion of the transaction to 100% or increasing the stock portion of the offer, therefore decreasing the cash portion.

Goldman, Sachs & Company, Convergence Advisors LLC and Latham & Watkins LLP will advise GeoEye on the proposed transaction.