Starbucks explored buying Chipotle, report says; company calls it rumors
Starbucks has worked on a possible takeover of Chipotle in recent months, the Financial Times reported Thursday, and Starbucks called it "rumors and speculation." A deal would put lattes and burritos under one roof run by Brian Niccol, who led Chipotle until 2024. It would be the biggest restaurant deal ever, topping Burger King's $11.4 billion Tim Hortons purchase.
Starbucks has explored buying Chipotle Mexican Grill, the Financial Times reported Thursday, citing people familiar with the matter. The coffee chain has worked with advisers in recent months, QSR magazine reported, though it is not clear whether Starbucks ever made a formal offer.
Starbucks did not confirm the report. "As a matter of policy, we don't comment on rumors and speculation," a spokesperson told The Seattle Times. The company added that its team is "laser focused" on its Back to Starbucks turnaround plan.
The connection between the two chains is personal. Starbucks CEO Brian Niccol ran Chipotle from 2018 until August 2024, when he left to lead the coffee giant, and since then Chipotle's stock has lost nearly half its value, the FT reported.
Investors moved quickly on the news. Chipotle shares jumped as much as 8.6% on Thursday, while Starbucks shares fell as much as 6.7%, QSR reported, citing Bloomberg. Starbucks shares later recovered some of that ground.
The size would set a record. Chipotle has an enterprise value above $40 billion, and a William Blair analyst estimated a takeover could cost close to $50 billion once a typical premium is added. That would top Burger King's $11.4 billion purchase of Tim Hortons in 2014, the largest restaurant deal so far.
Skeptics have already lined up against the idea. "Most mergers and acquisitions tend to fail," University of Washington finance professor Doron Levit told The Seattle Times. He doubts Starbucks has the cash for a deal this large. A Morningstar analyst wrote that a deal could distract from the Starbucks turnaround. Antitrust law may be less of a hurdle, because the two chains barely compete. "Starbucks sells coffee; Chipotle sells Mexican food," UW law professor Douglas Ross said.
Both chains are in the middle of a recovery. Starbucks has posted four straight quarters of positive same-store sales, while Chipotle's same-store sales fell 1.7% last year before rising 2.2% in the second quarter.
Starbucks has about 41,000 stores worldwide, and Chipotle has more than 4,200 restaurants, mostly in the U.S.
What we know: The FT reports Starbucks explored a Chipotle takeover, and Starbucks won't comment.
What we don't: Whether Starbucks made an offer, or what price it might pay.
Where outlets agree The Seattle Times, QSR magazine and Morning Brew all report that the Financial Times said Starbucks has explored a takeover of Chipotle.
Where they differ The outlets cited here report the same key facts so far.