What Happens to RSUs When Your Company Is Acquired
Restricted stock units follow the merger agreement and your award terms. This guide covers public-company RSUs, startup double-trigger RSUs and the tax withheld when they settle.
When your company is acquired, your RSUs are handled the way the merger agreement and your award terms say. Vested RSUs that have not yet settled are paid in cash or shares at closing. Unvested RSUs are usually converted into buyer RSUs at the exchange ratio, turned into cash awards on the old schedule, or accelerated. The merger agreement’s equity-awards section has your answer.
Restricted stock units are a promise to deliver shares (or their cash value) once vesting conditions are met. Because no exercise price is involved, an RSU is worth the full deal price per unit, which makes the math simpler than for stock options in an acquisition.
What happens to unvested RSUs in a merger?
Unvested RSUs are most often converted into something that keeps vesting on the original schedule: buyer RSUs in a stock deal, or a cash award in a cash deal. Some agreements accelerate part or all of them at closing.
| Treatment | How the value is set | When you get it |
|---|---|---|
| Converted to buyer RSUs | Your unit count times the exchange ratio, rounded as the agreement specifies | On your existing vesting dates |
| Converted to a cash award | Deal price per unit, fixed at closing | On your existing vesting dates or a date set in the agreement |
| Accelerated and cashed out | Deal price per unit, less tax withholding | Shortly after closing |
| Accelerated and settled in shares | Target shares delivered before closing, then exchanged like any other shares | At closing |
A conversion example with made-up numbers: 400 unvested target RSUs in a deal paying 0.75 buyer shares per target share become 300 buyer RSUs. If the buyer’s stock later rises or falls, so does the value of those 300 units. A cash award, by contrast, is fixed at the deal price.
How did a recent deal treat RSUs?
Sanofi’s cash acquisition of Dynavax Technologies at $15.50 per share shows a mixed approach. According to the Offer to Purchase filed with the SEC on January 12, 2026, most Dynavax RSUs, vested or unvested, were canceled at closing for $15.50 in cash per unit, less tax withholding.
Two groups were treated differently. Half of the unvested RSUs granted in 2025 became cash awards worth $15.50 per unit, payable six months after closing. Any RSUs granted in 2026 became cash awards payable one year after closing. Both kinds of cash award paid out early if the holder was terminated without cause, prorated for the 2026 grants. Grant year mattered, so the first thing to check in any deal is whether your grants fall into a carve-out.
How is tax withheld when RSUs settle in a deal?
RSU income is wages: the value at settlement is taxed as ordinary income and reported on your Form W-2. Employers withhold federal income tax, Social Security and Medicare from it.
As of November 2026, IRS Publication 15 (2026) sets these figures for supplemental wages such as RSU payouts:
| Tax | Rate or limit for 2026 |
|---|---|
| Federal income tax, flat supplemental rate | 22% |
| Federal income tax on supplemental wages above $1 million in the year | 37%, mandatory |
| Social Security | 6.2% on wages up to $184,500 |
| Medicare | 1.45%, plus 0.9% Additional Medicare Tax withheld on wages above $200,000 |
State income tax is withheld on top in most states. The flat 22% rate can be lower than your actual bracket, so a large cash-out can leave a balance due in April. When RSUs settle in shares, the company usually covers withholding by keeping some of the shares (net settlement) or by selling some for you (sell-to-cover). A tax professional can tell you whether estimated payments make sense.
What changes for RSUs at a private startup?
Private-company RSUs usually have two vesting conditions: a time-based schedule and a liquidity event such as an acquisition or IPO. These are called double-trigger RSUs, and nothing is taxed or delivered until both conditions are met.
An acquisition is normally the liquidity event. At closing, every RSU that has met its time condition settles at once, which can create a large tax bill in a single year. Units still inside their time schedule are usually converted or turned into cash awards that keep vesting.
An IPO works the same way. Figma’s July 2025 IPO prospectus described RSUs with a service-based condition and a performance-based condition that the offering satisfied. The company settled them net of shares withheld for taxes, using an assumed 49.5% combined withholding rate based on the $33.00 IPO price. Shares delivered at an IPO are usually covered by the IPO lockup period, so employees often cannot sell them right away.
Where do I find the RSU terms for my deal?
- Find the merger agreement, usually filed as Exhibit 2.1 to the target’s 8-K after the deal is signed.
- Search for “Company RSU,” “Restricted Stock Unit” or “Treatment of Company Equity Awards.”
- Check for carve-outs by grant year, by employee group (current versus former) and by award type (time-based versus performance-based units).
- For performance units, look for the percentage of target that will be assumed earned at closing.
- Compare with your award agreement in the stock plan portal, especially the change-in-control and termination sections.
If you also hold target shares outside your plan, those follow the rules in our guide to what happens to your shares in a merger.
Bottom line
Write down every grant date and unit count now, because recent agreements split treatment by grant year. If your RSUs are converted to a fixed cash award, the payout no longer moves with any stock price; if they become buyer RSUs, it does. That difference decides how much the deal price itself tells you about what you will receive.
FAQ
Do my vested RSUs disappear if the company is sold?
No. Vested RSUs that have already settled are ordinary shares and are exchanged for the deal consideration like any other shares. Vested units that have not yet settled are paid out under the merger agreement.
Why was so much withheld from my RSU payout?
The payout is supplemental wages, so the employer withholds federal tax at 22% (37% above $1 million for the year) plus Social Security, Medicare and usually state tax. Whether that matches your final tax bill depends on your other income.
What happens to my unvested RSUs if I am laid off after closing?
That depends on your award terms and the merger agreement. Some deals add protection, such as Dynavax’s cash awards, which paid out early on a termination without cause. Without such a clause, unvested units are usually forfeited when you leave.
Are double-trigger RSUs taxed at the acquisition even if I cannot sell?
If the acquisition satisfies the liquidity condition, the units settle and are taxed at that point. In a cash deal you receive cash, so selling is not an issue; in a stock deal you receive buyer shares, and any trading limits are set by the buyer’s policies.
