TLDR
- The Financial Times reports Starbucks has explored a takeover of Chipotle Mexican Grill.
- Chipotle stock rose about 6% Thursday while Starbucks stock fell about 4%.
- A deal would reunite Starbucks CEO Brian Niccol with the chain he once led.
- Any acquisition would value Chipotle near $41 billion, making it the largest restaurant deal ever.
- Starbucks is already spending heavily on its own turnaround, raising questions about how it would pay for a deal.
Chipotle stock climbed about 6% to $32.71 on Thursday after a report said Starbucks had explored buying the burrito chain. Starbucks stock fell about 4% to $90.21 on the same news, putting it on track for its lowest close since April.
Chipotle Mexican Grill, Inc., CMG
The Financial Times broke the story, citing people familiar with the matter. It said Starbucks has worked with advisers in recent months on a takeover proposal for Chipotle.
Neither company responded right away to requests for comment.
The report caught attention largely because of who’s involved. Starbucks CEO Brian Niccol ran Chipotle for years before taking the top job at Starbucks.
Niccol took over Chipotle in February 2018 and left in August 2024 to lead Starbucks’ own turnaround. Current Chipotle CEO Scott Boatwright served as chief operating officer under him, so the pair already know each other well.
A Costly Reunion?
A deal of this size would make history. Chipotle’s market value sits near $41 billion, which would make it the largest combination in restaurant industry history.
Starbucks, for comparison, is worth about $107 billion. Buying Chipotle at that price tag would not come cheap.
Analysts say Starbucks would likely need to borrow heavily or issue new stock to get a deal done. Lale Akoner, global market strategist at eToro, said without a strong financial case, investors might view the move as an expensive distraction rather than a smart bet.
Starbucks’ Own Turnaround
Starbucks is already spending big money fixing its own business. Niccol’s “Back to Starbucks” plan has focused on better staffing, faster service, and restoring the coffeehouse feel the brand built its name on.
The company has put more than $500 million into labor and scheduling since September 2024. That spending has taken a toll on profit.
Adjusted operating margin fell to 14.4% in the most recent quarter. That’s down from 16.7% two years earlier, according to LSEG data.
Starbucks also rolled out a $1 billion restructuring plan last September that included closing weaker North American stores. It shut roughly 250 cafes last month alone, saying those locations weren’t hitting acceptable financial results.
Chipotle, meanwhile, has had a bumpier road since Niccol left. The stock soared 928% during his time running the company.
It has dropped 37% since his departure, which has made Chipotle a cheaper target than it once was. That math may be part of what’s drawing Starbucks’ interest now.
Thursday’s trading session made the gap between the two companies clear. Chipotle stock was the top performer in the S&P 500 for the day.
Starbucks stock, on the other hand, was headed toward its weakest close in about six months. Both stocks remain in focus as investors wait for either company to confirm or deny the report.
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