Starbucks explored a takeover of Chipotle, report says
A reported Starbucks-Chipotle deal could expand Chipotle overseas, but it may distract Starbucks from its unfinished turnaround.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
A reported Starbucks Chipotle takeover would bring together two of the largest U.S. restaurant chains, but there is no announced transaction. The Financial Times reported that Starbucks had worked with advisers on a proposal in recent months, according to CNBC, raising questions about whether the companies’ potential fit outweighs the execution risk for Starbucks.
CNBC said Starbucks declined to comment and Chipotle did not immediately respond to its request for comment. D.A. Davidson analyst Matt Curtis put the chances of a completed deal at about 20%, underscoring that the reported talks may not lead to an offer or an agreement.
Starbucks generates about $31 billion in annual U.S. sales, according to CNBC, while Chipotle has more than $11 billion in U.S. systemwide sales. Chipotle shares rose about 7% in afternoon trading after the report, while Starbucks shares fell roughly 4%, CNBC reported.
Why would Starbucks buy Chipotle?
Starbucks Chief Executive Brian Niccol has direct experience with the burrito chain. He ran Chipotle for more than six years before becoming Starbucks’ CEO in 2024, according to CNBC, giving the potential buyer a leader familiar with its operations and brand.
International expansion is another possible rationale. CNBC reported that Chipotle has about 100 restaurants outside the United States, compared with roughly 23,000 Starbucks locations abroad. Starbucks’ overseas presence could give Chipotle a broader base for expansion, though neither company has outlined such a plan.
The chains may also have opportunities to share parts of their operations. Stephens analyst Jim Salera estimated that about 90% of Chipotle restaurants are within one mile of a Starbucks cafe, CNBC reported. Salera said that proximity could support shared real-estate development and operating efficiencies; he also suggested overlapping customers could make a combined rewards program possible.
Both companies operate most of their U.S. restaurants, although Starbucks also has thousands of licensed U.S. cafes, CNBC said. That common company-operated approach could make the businesses more compatible than Chipotle’s earlier relationship with McDonald’s, which held a majority stake beginning in 1998 before selling out in 2006. CNBC reported that the companies had disagreements over franchising and ideas such as drive-throughs and breakfast.
What could make a Starbucks-Chipotle deal difficult?
The clearest risk is management focus. Starbucks is still carrying out a turnaround under Niccol. CNBC reported that the company’s U.S. business has shown early improvement, but that the work remains unfinished; pursuing and integrating a large acquisition could add to the demands on leadership.
Potential savings also remain speculative. CNBC said a combination could lead to cuts in overlapping corporate roles and other efficiencies, but no price, financing plan, savings target or integration plan has been made public. For now, the reported exploration represents a possible strategic move rather than a confirmed takeover.
This story draws on original reporting from CNBC.