Starbucks has explored acquiring Chipotle Mexican Grill, the Financial Times reported on Thursday, citing people familiar with the matter. Starbucks executives have worked with advisers in recent months on a takeover proposal for the burrito chain, though no formal offer has been submitted and it is unclear whether the effort is still active.
According to the Financial Times, which first reported the story, Starbucks executives teamed up with outside advisers in recent months to discuss a takeover proposal for Chipotle. People familiar with the transaction told the FT that a deal of this size may never materialize, and the current status of the plans could not be determined.
Neither Starbucks nor Chipotle immediately responded to requests for comment, Barron's reported.
The speculation did not come out of nowhere. Earlier this week, Semafor raised the possibility that the two chains could merge and run operations similar to Yum! Brands, which houses KFC, Pizza Hut and Taco Bell under one roof. And last week, reports surfaced that Chipotle had enlisted bankers to fend off a potential takeover, after which rumors about the identity of an interested buyer began to swirl.
Chipotle carries a market value of nearly $41.3 billion, while Starbucks is worth roughly $107 billion, according to MarketSurge data cited by Investor's Business Daily. Together, the two companies generated nearly $50 billion in sales last year.
The scale is striking. Starbucks operates about 41,000 company-owned and licensed stores worldwide, while nearly all of Chipotle's 4,200 restaurants sit inside the United States. The Financial Times noted that a takeover "would eclipse Burger King's $11.4bn acquisition of Canadian coffee-and-doughnut chain Tim Hortons in 2014" — making it the largest combination in restaurant industry history.
Investors delivered a split verdict on Thursday. Chipotle shares jumped as much as 8.6% in early trading and closed up 6.2% at $32.71, the top performer in the S&P 500 for the session, according to Dow Jones Market Data. Starbucks, meanwhile, tumbled as much as 6.7% intraday and closed 3.6% lower at $90.21, its lowest close since April.
The logic is familiar in M&A: target shareholders price in a takeover premium, while acquirer shareholders worry about the bill. Chipotle has wrestled with slowing same-store sales over the past year and sits on a 7% year-to-date loss; Starbucks shares were up just under 8% on the year before the report.
At the center of the story is Brian Niccol, who ran Chipotle from February 2018 until September 2024, when he jumped to Starbucks. During his six-year tenure, he navigated the chain through food-safety and quality issues, streamlined operations and overhauled digital ordering. Annual sales doubled to nearly $10 billion by 2023, and the stock hit record highs in 2024 following a stock split.
Since Niccol's departure, Chipotle shares have plunged 39%. He is now in the middle of his own sweeping turnaround at Starbucks under the "Back to Starbucks" strategy. Last month, Niccol said the company had invested more than $500 million in additional staffing, scheduling and other employee initiatives, while revamping locations and adding new menu items.
The reunion angle runs deep: Chipotle's current CEO, Scott Boatwright, served as chief operating officer during Niccol's tenure, and Niccol previously ran Taco Bell before that.
First, will Starbucks actually submit a formal bid? No one has confirmed it. Second, how would the coffee giant pay for it? A $41 billion target would be an enormous undertaking for a $107 billion company, and the financing structure would determine whether the deal is remotely feasible. Third, regulators: a combination of this size in the restaurant sector would almost certainly face intense antitrust scrutiny.
For Starbucks, it would be a defining gamble. Success would give the company a second growth engine beyond coffee — and a global platform to take Chipotle's nearly all-American footprint abroad. Failure, or even a costly failed attempt, would weigh on a turnaround that is still in its early innings.