The Financial Times reported that Starbucks has been looking at a possible takeover of Chipotle Mexican Grill, which could bring two of America’s best-known restaurant brands under one company. Starbucks has explored buying Chipotle in a massive deal.
Starbucks has not confirmed the takeover talks. But there is no confirmed deal yet. Starbucks has already worked with advisers on the plan. It is still an early-stage plan. It is not clear whether Starbucks has officially made an offer to Chipotle . The takeover may never happen. People familiar with the matter warned that a deal of this size could fail to move forward. The possible takeover comes as Starbucks tries to turn its business around. The turnaround is showing some early signs of improvement. Niccol’s Starbucks plan focuses on improving the customer experience. His strategy includes hiring more baristas, adding new menu items, making service faster and renovating Starbucks cafés. Investors reacted strongly when Niccol joined Starbucks. The move came at a difficult time for Starbucks . Starbucks’ board was facing pressure from activist investor Elliott Management to address a sharp fall in the company’s sales. Niccol had built a strong reputation at Chipotle. During his more than six years as CEO, he helped lead Chipotle through a major turnaround after the restaurant chain faced a serious food-safety crisis. Niccol still has a connection to Chipotle’s home base. He continues to have a home in Newport Beach, California, the city where Chipotle is headquartered. Starbucks also has a presence near Chipotle’s headquarters. The Seattle-based coffee company has built a satellite executive office in the Newport Beach area. Chipotle has faced pressure on its stock recently. Consumer concerns have also affected Chipotle. The company faced concerns last summer after it removed jalapeño peppers from a supplier that had been linked to a salmonella outbreak. It remains unclear whether Starbucks will make a formal offer or whether the two companies will ultimately reach an agreement. If completed, it would be a landmark restaurant-industry deal.
The deal could be worth nearly $39 billion. Chipotle currently has a market value of about $39 billion, making the possible takeover one of the biggest deals ever seen in the restaurant industry. Starbucks shares jumped 24% on the day his move to the company was announced. Its shares have fallen almost 20% over the past year, according to the Financial Times. A nearly $39 billion Chipotle takeover by Starbucks would create a restaurant giant with almost $50 billion in annual sales, making it one of the biggest corporate combinations ever seen in the sector.
People familiar with the matter told the Financial Times that Starbucks has worked with advisers in recent months on a possible proposal to buy Chipotle. Combining two major consumer brands would also be complicated, according to the Financial Times. Niccol is leading a turnaround plan called “Back to Starbucks,” which aims to improve the coffee chain’s performance. Starbucks has started seeing higher same-store sales and profits under Niccol’s strategy, according to the Financial Times. The Financial Times report only says Starbucks has explored a takeover.
Chipotle’s stock has lost a lot of value since Niccol left. The deal would bring Starbucks CEO Brian Niccol back to Chipotle. He became well known in the restaurant industry during his time at the burrito chain. A Starbucks-Chipotle deal would be much bigger than the biggest previous restaurant deal. The possible deal comes during a major M&A boom in the US. Companies across corporate America are pursuing large mergers and acquisitions as businesses look to take advantage of what the Financial Times described as lighter antitrust regulation under US President Donald Trump . The combined company would be huge. Starbucks has a much larger global store network. Chipotle is mainly a US business. Niccol has also brought former Chipotle executives to Starbucks. Chipotle’s current CEO also has a connection to Niccol.
Niccol left Chipotle in August 2024. He moved from Chipotle to Starbucks in 2024, making him the key link between the two companies. Chipotle shares have nearly halved in value since Niccol left the company in August 2024. The takeover would be larger than Burger King’s $11.4 billion acquisition of Tim Hortons in 2014. Starbucks and Chipotle together generated almost $50 billion in sales last year. Starbucks has around 41,000 owned and licensed stores worldwide, with about two-fifths of those stores located in the US. Chipotle has around 4,200 restaurants, and almost all of them are located in the US.
The possible takeover would therefore bring together two companies with several existing links.
Niccol is now the chief executive of Starbucks, but he previously led Chipotle for more than six years. He hired Tressie Lieberman and Stephen Piacentini, who previously worked at Chipotle, to lead marketing and coffee-shop development at Starbucks respectively. Chief executive Scott Boatwright previously worked as Chipotle’s chief operating officer while Niccol was CEO. Niccol previously ran Chipotle, two former Chipotle executives now work at Starbucks, and Chipotle’s current CEO previously worked under Niccol.
