Sandy Saxby kneels next to a piece of debris from the ill-fated Antares rocket in Chincoteague, Virginia, October 29, 2014. [Photo/Agencies]

Shares of Orbital, which agreed to buy Alliant Techsystems Inc's aerospace and defense business in April, tumbled as low as $25.02 and closed down 16.8 percent at $25.27.

Alliant, also known as ATK, said it was conducting a "thorough evaluation" of the deal, touted by the companies at the time as a $5 billion merger of equals. ATK shares closed down 6.5 percent at $121.34.

Still, sources familiar with the situation said the deal was unlikely to unravel.

"There is no specific provision in the merger agreement for a launch failure," Orbital CEO David Thompson told analysts after ATK's statement. "As far as I know, I think things will continue."

ORBITAL'S NEXT LAUNCH SCHEDULED FOR APRIL

In other collateral damage, the explosion destroyed a small satellite built by closely held Planetary Resources Inc with backing from Google Inc CEO Larry Page, Virgin Group founder Richard Branson and other well-known investors. The company intends to mine asteroids for fuel, water and minerals.

Dulles, Virginia-based Orbital Sciences is one of two companies NASA has hired to fly cargo to the station after NASA's space shuttles were retired in 2011. Tuesday's flight was to be the third of eight under the company's $1.9 billion contract. Its next launch had been slated for April 2015, according to internal NASA schedules.

The second US supply line to the station is run by privately owned Space Exploration Technologies, or SpaceX, which is preparing its fourth flight under a separate $1.6 billion NASA contract, slated for Dec. 9.

The accident is unlikely to affect the existing contracts but could influence the awarding of follow-up contracts that NASA is soliciting.

Russia's Roskosmos space agency said it was ready to help ferry extra US cargo to the space station if NASA requested. The station is overseen by Russia and the United States, whose relations are at a low ebb over the Ukraine crisis.

In a long-scheduled mission, an unmanned Russian Progress supply vehicle was launched from Kazakhstan hours after the explosion and the capsule, carrying more than 5,000 pounds of food, fuel and supplies, reached the station Wednesday morning.

RUSSIAN ROCKET ENGINES

The Antares is powered by a pair of Soviet-era NK-33 engines refurbished by GenCorp Inc's Aerojet Rocketdyne division and resold as AJ-26 motors.

In May, an AJ-26 exploded during a ground test in Mississippi. GenCorp shares on Wednesday dropped 5.4 percent to $16.26.

Glenn Mahone, an Aerojet spokesman, said it was working closely with investigators but declined to comment further.

With the GenCorp engine involved in two accidents, concerns over the availability of Russian engines for use in US rockets have intensified. Russia has threatened to suspend exports in response to US trade sanctions prompted by Moscow's annexation of Ukraine's Crimea region.

The accident should have no impact on ferrying crew to and from the station, all of whom fly aboard Russian Soyuz capsules.

It was unclear how much Tuesday's explosion would cost Orbital. The rocket was insured for around $40 million to $50 million of losses, insurance sources said. One source pinned the loss at $48 million.

Willis Group Holdings Plc, the broker for the insurance risk, declined to comment.