UPDATE 1-ATK to merge with Orbital after divesting sports gun unit

(Corrects paragraph 3 to remove incorrect reference to Orbital as a maker of guns and ammunition)

April 29 (Reuters) - Alliant Techsystems Inc, the world's largest ammunition maker, said it would merge with Orbital Sciences Corp, after spinning off its sporting gun business.

Orbital shares were up nearly 19 percent in premarket trading. Shares of Alliant Techsystems, better known as ATK, were up 5 percent.

Orbital makes small- and medium-class rockets and space systems for commercial, military and civil government customers.

Orbital stockholders will get 0.449 ATK shares per Orbital share, ATK said on Tuesday. The combined company, to be called Orbital ATK Inc, will own about $1.7 billion of ATK's debt.

ATK said its shareholders will own about 53.8 percent of the combined company, with Orbital shareholders holding the rest.

The deal is expected to close by the end of this year.

BofA Merrill Lynch acted as ATK's financial adviser and Cravath, Swaine & Moore LLP was its legal adviser. Orbital's financial advisor was Citigroup and its legal advisor was Hogan Lovells US LLP.

ATK's outdoor sports business, which will be spun off to its shareholders, makes sporting rifles, holsters and harnesses.

ATK shares closed at $138.82 on the New York Stock Exchange on Monday. Orbital shares closed at $26.57.

(Reporting by Mridhula Raghavan in Bangalore; Editing by Joyjeet Das)