Starbucks Explored a Chipotle Takeover, Report Says, Lifting Chipotle Shares

Starbucks has explored buying Chipotle Mexican Grill, the Financial Times reported Thursday, a move that would bring chief executive Brian Niccol back to the burrito chain he led before taking over the coffee company in 2024.

According to the report, Starbucks has worked with advisers in recent months on a possible takeover proposal. It was not clear whether a formal offer had been made, CBS News noted. Starbucks said it does not comment on rumors and speculation and that its team is focused on its Back to Starbucks turnaround plan, adding that it has strong momentum. Chipotle did not comment, NBC News reported.

Investors reacted quickly. Chipotle shares rose about 6 percent on the day, while Starbucks shares fell sharply in early trading before closing slightly lower, NBC News reported; CBS News said Chipotle had jumped as much as 8 percent. Before the report, Chipotle was valued at about $39 billion; Starbucks is worth more than $105 billion.

A deal of that size would rank among the largest restaurant acquisitions on record. Analysts at Melius Research pointed to Burger King’s $11.4 billion purchase of Tim Hortons in 2014 as one of the biggest to date, CBS reported.

The two chains are heading in different directions. Chipotle’s stock has lost roughly half its value since Niccol left in August 2024, CBS News reported, and more than a fifth over the past year, as diners pull back on spending and food and labor costs squeeze margins across the industry. Starbucks, by contrast, has reported four straight quarters of comparable sales growth under Niccol, though at a cost, according to Reuters reporting published by the Guardian: it has committed at least $500 million to staffing and store changes, and its adjusted operating margin has slipped from 16.7 percent two years ago to 14.4 percent, based on LSEG data.

That is why many analysts were skeptical. Buying Chipotle would likely require heavy borrowing or issuing new shares, one strategist told Reuters, and investors could see it as an expensive distraction before the turnaround is complete. TD Cowen called a deal a low-probability outcome for now, and analysts at Seaport Research asked what Niccol would do differently from Chipotle’s current leadership, CBS News reported.

The case for the idea is mostly about growth. Niccol knows Chipotle’s operations intimately, and some analysts quoted by the Guardian said Starbucks’ licensing partners abroad could speed Chipotle’s expansion beyond its roughly 100 international locations. Chipotle has nearly 4,000 restaurants in the United States, while Starbucks has about 40,000 stores worldwide, according to the Guardian.

For customers already paying more for coffee and burritos, the more immediate question is whether consolidation would do anything for prices. Neither company has addressed that, and Starbucks is due to report its next quarterly results later this month.