Chipotle Mexican Grill Inc. shares jumped after the Financial Times reported that Starbucks Corp. has worked with advisers in recent months on a takeover proposal for the burrito chain.
The status of the takeover plans couldn’t be immediately learned and a mega deal of this size might never get off the ground, the Times said, citing people familiar with the matter. Brian Niccol, Starbucks’ chief executive officer since 2024, previously spent six years as the top executive at Chipotle, where he spearheaded a period of rapid growth.
Starbucks declined to comment on the FT report, and a spokesperson for Chipotle couldn’t be reached for comment.
Chipotle shares surged as much as 8.6% in New York trading on Thursday. The stock has fallen about 20% over the past year. Starbucks declined as much as 6.7%, the most intraday in more than a year, before paring its drop.
Starbucks is in the midst of a broad turnaround strategy that touches on everything from its store design to how fast its beverages are made to its food lineup . Niccol has complained that its food counters don’t look bountiful enough and said he doesn’t like the cardboard signage that displays photos of its food menu.
Analysts expressed skepticism about a potential deal given the vast differences between the two businesses. Additionally, Chipotle’s market cap is about $41 billion, and a potential acquisition would rank among the largest ever in the restaurant sector, according to data compiled by Bloomberg.
“Initially, it doesn’t seem like there’s that many synergies for something like this to happen,” Melius Research analyst Jacob Aiken-Phillips said in an interview. “Obviously, Brian Niccol has intimate knowledge of Chipotle’s operations and Chipotle has pulled back a ton, but I’d have to hear a lot more about what the potential plan would be to see if there’s actually anything to be gained.”
Aiken-Phillips added that access to Chipotle’s supply chain and Starbucks’ recent efforts to improve its food offerings could provide some justification for the potential overture.
“Chipotle has purchasing scale of all these good, fresh ingredients and relationships across the country, so certainly that could help, but it’s not like Starbucks has a grill,” he said.