(Bloomberg) -- Western Digital Corp. is receiving a $900 million investment led by Apollo Global Management Inc., getting financial firepower at a tough time for the memory industry that could see further consolidation. The chipmaker’s stock fell 6% in late trading on a disappointing revenue forecast.

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Funds managed by Apollo are buying convertible preferred stock in Western Digital and Apollo Partner Reed Rayman will get a board seat, according to a statement Tuesday. Hedge fund Elliott Investment Management is also participating.

Tuesday’s investment is a precursor to a merger with Japan’s Kioxia Holdings Corp., according to people familiar with the matter. Those talks are still active and progressing, the people said, asking not to be identified because the matter is private. The hard-drive business is expected to remain separate but details could still change.

Bloomberg News previously reported that the parties have figured out a rough structure where Western Digital would spin off its flash business and merge it with Kioxia, creating a publicly traded company in the US. A representative for Western Digital declined to comment on deal talks.

Western Digital Chief Executive Officer David Goeckeler said Apollo and Elliott’s perspectives will help facilitate the next stage of Western Digital’s strategic review.

“We look forward to working together in advancing our goal of creating value and finalizing the best possible strategic outcome for our shareholders,” Goeckeler said in a statement.

Rayman called Western Digital an “iconic American business that is critical to global digital infrastructure.”