Starbucks Explores Chipotle Takeover as It Pursues Turnaround

Starbucks has explored a takeover of Chipotle Mexican Grill, the Financial Times reported Thursday, raising the prospect of a major restaurant deal that would reunite Starbucks chief executive Brian Niccol with the burrito chain he once led.

Starbucks hired advisers in recent months to work on a potential proposal, the Financial Times reported, citing people familiar with the matter. It is unclear whether Starbucks has made a formal offer, CBS News reported, citing the Financial Times. NBC News said it had not independently confirmed the takeover report.

Starbucks did not confirm any deal talks. “Our team is laser-focused on executing our Back to Starbucks strategy,” the company said in a statement to NBC News. “We have strong momentum and confidence in our long-term growth potential.” Starbucks said it typically does not comment on “rumors and speculation.” Chipotle did not respond to requests for comment reported by the news outlets.

Chipotle shares rose on the report, climbing as much as 8% Thursday, according to CBS News. The Guardian reported they were up about 6% at one point. Starbucks shares fell as much as 6.6% during the session but closed only slightly lower, NBC News reported. The outlets also cited different market values during the day: The Guardian and NBC News put Chipotle’s value near $39 billion, while CBS News described it as a $41 billion company. Starbucks was valued at more than $105 billion, according to NBC News.

Niccol joined Starbucks in September 2024 after six years leading Chipotle. At Starbucks, he has pushed to shorten waits and restore the atmosphere of its coffeehouses through staffing, store improvements and new service standards. The company has also refreshed its menu and is rebooting its rewards program, NBC News reported.

The effort is costly. Starbucks has committed at least $500 million to labor investments since Niccol arrived, The Guardian reported. Its adjusted operating margin was 14.4% in its fiscal third quarter, down from 16.7% in the comparable quarter two years earlier, according to LSEG data cited by The Guardian. Starbucks has reported four consecutive quarters of comparable sales growth under Niccol, but he said in July, “We have more work to do.”

Analysts questioned whether an acquisition would fit that agenda. TD Cowen called a deal “a low-probability outcome at this stage,” saying a roughly $40 billion purchase would appear inconsistent with Niccol’s focus on the U.S. turnaround. “A deal could require heavy borrowing or issuing shares,” Lale Akoner, global market strategist at eToro, told The Guardian. “Without a compelling financial case, investors may view the deal as an expensive distraction.”

Chipotle has faced softer customer traffic and pressure from higher food and labor costs. Its shares have fallen roughly 50% since Niccol left, according to CBS News. Some analysts see a possible growth opportunity: Jim Sanderson of Northcoast Research told The Guardian that Starbucks’ licensed partnerships in Europe could help Chipotle expand internationally. At the end of last year, Chipotle had nearly 4,000 U.S. restaurants and about 100 abroad; Starbucks had roughly 40,000 stores worldwide.