The simple version

When one company buys another, holders of the target are sometimes given a choice: take cash, take shares of the buyer, or take a standard mix of both. The agreement also fixes how much cash and how many shares the buyer will hand out in total.

Those two things can conflict. If more holders ask for cash than the agreed total allows, the extra requests are scaled back and those holders get part of their payment in shares instead. That scaling back is called proration, and it means an election is a request rather than a guarantee.

The numbers

• RXO entered into a merger agreement with C.H. Robinson on October 4, 2026, announced the following morning (RXO, Form 8-K, filed October 5, 2026)
• Each RXO share converts, at the holder's election and subject to proration, into one of three things (RXO, Form 8-K)
• Standard consideration: $17.25 in cash plus 0.0856 of a C.H. Robinson share (RXO, Form 8-K)
• Cash consideration: $30.25 in cash, without interest (RXO, Form 8-K)
• Stock consideration: 0.1992 of a C.H. Robinson share (RXO, Form 8-K)
• Shares for which no election is made receive the standard consideration (RXO, Form 8-K)
• Elections for cash or stock are prorated so the total cash paid and shares issued are the same as if every share had taken the standard consideration (RXO, Form 8-K)
• Across the deal, approximately 57% of the merger consideration is paid in cash and 43% in C.H. Robinson shares (C.H. Robinson and RXO, press release, October 5, 2026)
• Cash is paid in place of any fractional C.H. Robinson share (RXO, Form 8-K)

Why the buyer caps the mix at all

The total split is not a detail the buyer leaves to chance. Cash usually has to be borrowed, which sets how much debt the buyer takes on. Shares have to be issued, which divides the combined company among more owners.

Letting holders pick freely would make both of those unpredictable. So the agreement fixes the aggregate first and lets the elections sort out who gets which form, within that ceiling.

The filing states the rule plainly: elections are prorated so the cash paid and shares issued come out the same as if everyone had taken the standard mix. The choice reshuffles who receives cash and who receives stock. It does not change the totals.

Doing nothing is also a choice here. A share with no election made receives the standard consideration, which in this agreement is the mix the aggregate is built around.

The actual math on 100 shares

All three options are priced to the same value on the date the release used. The arithmetic below is ours, on figures the filing and release state.

• Standard: 100 shares gives $1,725 in cash plus 8.56 C.H. Robinson shares.
• All cash, if the election is filled in full: $3,025.
• All stock, if the election is filled in full: 19.92 C.H. Robinson shares.
• At the $151.88 average share price the release used, 8.56 shares is about $1,300 and 19.92 shares is about $3,025, so all three come to roughly the same total on that date.

The words "if the election is filled in full" carry the point. If cash elections are oversubscribed, a holder who asked for all cash receives part of the payment in shares, and the only way to know the proportion is after the election deadline passes.

What this means

When a merger offers a choice of consideration, the agreement sets both the menu and the totals, and the second one wins. The proration language sits in the merger agreement and in the Form 8-K that describes it, usually in the same paragraph as the election itself.

The practical details, including the election deadline and the form to use, arrive later in the proxy statement and election materials sent to holders. The choice is real, and so is the limit on it.

What this is NOT

This article explains how a cash-or-stock election and proration work, using the C.H. Robinson and RXO merger agreement as the example. It is not a recommendation to buy, sell, or hold RXO, C.H. Robinson, or any security, and it is not guidance on which election any holder should make, which depends on circumstances including taxes that an article cannot assess. It does not predict whether the deal closes, when, or at what value, and it does not predict which way elections will be oversubscribed. It is not tax advice: the tax treatment of cash versus stock in a merger is a question for a tax professional. The 100-share arithmetic is ours, on figures the filing and release state. This is not a political endorsement or criticism of anyone.

Sources

• RXO, Inc., Form 8-K, Item 1.01, filed October 5, 2026: https://www.sec.gov/Archives/edgar/data/1929561/000114036126038548/ef20083265_8k.htm
• C.H. Robinson and RXO, Exhibit 99.1 to RXO Form 8-K, October 5, 2026: https://www.sec.gov/Archives/edgar/data/1929561/000114036126038548/ef20083265_ex99-1.htm
• RXO, Inc., Agreement and Plan of Merger, Exhibit 2.1 to Form 8-K, October 4, 2026: https://www.sec.gov/Archives/edgar/data/1929561/000114036126038548/ef20083265_ex2-1.htm