Starbucks explored takeover of Chipotle, FT reports; Chipotle shares rise

Starbucks has explored a takeover of Chipotle Mexican Grill, the Financial Times reported on Thursday, citing people familiar with the matter. According to the report, Starbucks has worked with advisers in recent months on a takeover proposal. CBS News said the Financial Times reported it is unclear whether Starbucks has made a formal offer. A deal would reunite Starbucks chief executive Brian Niccol with the chain he led before joining Starbucks in 2024. [ 3 , 4 , 7 , 8 , 9 ]

"As a matter of policy, we don't comment on rumors and speculation," a Starbucks spokesperson said, according to the Seattle Times. In a statement reported by NBC News, Starbucks said: "Our team is laser-focused on executing our Back to Starbucks strategy. We have strong momentum and confidence in our long-term growth potential." NBC News said the company looks forward to sharing its next earnings results later in October and that NBC had not confirmed the report. Chipotle did not immediately respond to requests for comment. [ 3 , 4 , 7 , 8 , 9 ]

Chipotle shares rose about 6% on Thursday, according to the Guardian and CNBC; NBC News put the gain at 6.2% and CBS News said the stock jumped as much as 8%. Accounts of Starbucks shares differ: the Guardian said they were down about 3%, NBC News said they fell as much as 6.6% before closing slightly lower, and CBS News said they slipped about 4.4% before ending largely flat. The Guardian, citing LSEG data, put Chipotle's market capitalization at nearly $39 billion and Starbucks' value at about $107 billion; NBC News gave about $39 billion and more than $105 billion, while CBS News described Chipotle as a $41 billion chain, citing the Financial Times. [ 3 , 4 , 7 , 8 ]

According to CNBC, Starbucks is the second-biggest U.S. chain by sales with about $31 billion in annual domestic sales, and Chipotle is seventh with more than $11 billion. Industry analysts told CBS News a merger would be one of the largest restaurant acquisitions in history; Melius Research cited Burger King's $11.4 billion purchase of Tim Hortons in 2014 as one of the largest to date. The Seattle Times said Chipotle has almost 4,300 locations in the U.S. and Canada and 30 in Europe, while Starbucks had 18,371 North American stores at the end of June. [ 4 , 7 , 9 ]

Analysts raised doubts. D.A. Davidson analyst Matt Curtis put the odds of a deal at about 20%, CNBC reported. "A deal could require heavy borrowing or issuing shares," said Lale Akoner of eToro, according to the Guardian. MarketWatch said Starbucks investors would likely not be happy about adding debt given its already high debt load. Doron Levit of the University of Washington's Foster School of Business told the Seattle Times he is not convinced Starbucks has the cash needed, and the paper said analysts and academics predict hurdles over size, cost and antitrust laws. [ 3 , 4 , 6 , 9 ]

Niccol took charge at Starbucks in September 2024 after six years as head of Chipotle, the Seattle Times reported. CBS News said Chipotle's stock has dropped about 50% since he left in August 2024. Since Niccol joined, Starbucks has committed at least $500 million to labor investments as part of its reorganization, and its adjusted operating margin was 14.4% in the fiscal third quarter, down from 16.7% two years earlier, the Guardian reported, citing LSEG data. [ 3 , 7 , 9 ]