The MOU also requires both companies to contribute their respective expertise to provide modern air operations training.
Northrop Grumman navigation, targeting and survivability vice-president James Conroy said: “Training NATO pilots to operate in contested electromagnetic spectrum environments will be critical to mission success.
“Through our collaboration with Terma to provide our advanced capabilities, we can elevate aviation training for pilots in Europe.”
The training opportunities will allow military personnel to train in a modern, reactive battlespace environment, which will help them to identify and counter enemy missiles or artillery threats.
Terma support and services senior vice-president Thorbjørn Machholm said: “Terma has a longstanding relationship with European Air Forces (EAF) in terms of designing, manufacturing, integrating, and supporting EW equipment.
“We look forward to working closely with Northrop Grumman on European EW simulation and training opportunities.”
Denmark-based company Terma primarily develops systems and products for defence and non-defence sectors.
The products include surveillance, security and naval radar systems, command-and-control systems, self-protection systems for aircraft, as well as aerostructures for the aircraft industry, including the F-35 Lightning II aircraft programme.