Broadcom shares surged in Thursday’s extended trading session after the chip maker announced it would buy back up to $12 billion of its common stock.

The buyback had been expected on Wall Street since Broadcom last month dropped its offer to buy Qualcomm after the deal was blocked by President Donald Trump due to national security concerns. At the time, the chipmaker was based in Singapore.

“The initiation of a stock repurchase program enhances our capital allocation strategy and provides us with a complementary tool to deliver value to our shareholders,” Broadcom CFO Tom Krause said in a news release.

“We are maintaining our policy of delivering 50% of trailing 12-month free cash flow to shareholders in the form of dividends while adding the ability to use the balance of our free cash flow not only for acquisitions but also for opportunistic buybacks,” he added.

In regular trading Thursday, Broadcom shares fell about 0.4% to $239.43. But on news of the buyback, the stock jumped 4.2% to $249.50 in the after-hours session.

“While a large acquisition still could be in the cards for Broadcom, management is adding another option for its free cash flow” by buying back shares, The Motley Fool reported.

The publication noted that Broadcom previously prioritized acquisitions for any free cash flow beyond the 50% it said it planned to pay in dividends. “Recent stock-price volatility may have influenced Broadcom to be better prepared to capitalize on opportunities to buy its own stock at a discount,” The Motley Fool said.

The stock had fallen as low as $228 earlier this month.

The repurchase program is effective immediately until Nov. 3, 2019. As of Thursday’s close, the company has a market cap of $98.7 billion and about 410 milion shares outstanding, according to Thomson Reuters data.

“Share repurchases may be made through a variety of methods, including open market or privately negotiated transaction,” Broadcom said.

The company generated $5.5 billion in free cash flow in fiscal 2017, up from $2.7 billion in fiscal 2016, and its trailing-12-month free cash flow was $5.9 billion.

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