Western Digital said on Monday it would split itself into two companies that would focus on the hard drive and flash memory markets, days after talks of a merger with Japan’s Kioxia stalled.

Western Digital shares were up more than 12% before the bell.

The company launched a review last year after activist investor Elliott Management disclosed a stake of nearly $1 billion in Western Digital and pushed it to separate those businesses.

Reports last week said merger talks between Western Digital and Japan’s Kioxia Holdings had stalled as opposition from Kioxia investor SK Hynix complicated the on-again, off-again deal.

Western Digital has been grappling with a global chip glut and weak demand for flash memory products, which have in turn increased pressure on chipmakers to consolidate.

If the Western Digital-Kioxia deal had gone through, the combined company would have controlled a third of the global NAND flash market, on par with top player Samsung Electronics and threatening the position of Hynix, the world’s No. 3 maker of NAND flash memory.

“Given current constraints, it has become clearer to the Board in recent weeks, that delivering a stand-alone separation is the right next step in the evolution of Western Digital and puts the company in the best position to unlock value for our shareholders,” CEO David Goeckeler said.

The separation of the businesses is planned to be structured in a tax-free manner and targeted for the second half of 2024, according to the company.