Nine months ago activist investor Carl Icahn launched a drive to get eBay Inc. (NASDAQ: EBAY) and its CEO John Donahoe to split off the PayPal payments segment of the company, arguing that PayPal would be more valuable on its own. On Tuesday, eBay’s board and Donahue announced that they had reached the same conclusion.

If all goes as expected, eBay will shed PayPal by the middle of next year. No details about how the split would be handled, but we do know that John Donahoe will not serve as CEO of either company. The “new” eBay will be run by Devin Wenig, currently president of eBay Marketplaces. PayPal will get its new chief executive, Dan Schulman, from American Express Co. (NYSE: AXP), where he is currently president of that company’s enterprise growth group.

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Icahn’s August SEC filing indicated that he owned nearly 31 million shares of eBay, or about 2.5% of the company.

Donahoe and current eBay CFO Bob Swan will be responsible for separating the businesses, according to the press release, but neither will have an executive role in either company following the split. According to Tuesday’s announcement:

Neither Donahoe nor Swan will have an executive management role in the new eBay and PayPal companies. But to provide continuity, they each expect to serve on one or both of the boards of the two companies.

Donahoe never wanted to separate the companies and he persuaded Icahn in April to accept a board seat in exchange for giving up a threatened proxy fight. But Icahn never really gave up on the idea of splitting the company. He said at the time:

[Donahoe and I] both strongly believe in the great potential of eBay and PayPal, and I have found a number of his ideas to be extremely compelling. However, I continue to believe that eBay would benefit from the separation of PayPal at some point in the near future and intend to continue to press my case through confidential discussions with the company. While John has made no commitments regarding such a separation, he and I have agreed to meet regularly when he is in New York to discuss strategic alternatives.

When Icahn seemingly caved in for a seat on the board, we noted that even though Donahoe lost the battle, he declared victory. Now, however, he’s fallen on his sword.

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