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Starbucks has considered buying Chipotle Mexican Grill, part of an ambitious gamble to unite two of America’s best-known brands in a deal that would be the biggest tie-up ever in the restaurant industry.
The world’s largest coffee chain has been working with advisors in recent months on a proposed takeover of Chipotle, a burrito chain with a market value of $41 billion, according to people familiar with the matter.
It could not be determined the status of Starbucks’ takeover plans and whether the company has submitted a formal offer to Chipotle.
A transformative deal of this scale could struggle to get off the ground, the people warned, and a tie-up may never materialize given the complexity of merging two consumer giants.
The initial plans would also reunite Starbucks CEO Brian Niccol with the fast-food chain where he made his name during his six-year tenure as chief executive. Since Niccol left Chipotle in August 2024, its stock value has almost halved.
Starbucks shares fell 3.6 percent following the FT report, giving it a market capitalization of $103 billion. Chipotle shares jumped 5.7 percent.
A potential Chipotle buyout would eclipse Burger King’s $11.4 billion acquisition of Canadian coffee and donut chain Tim Hortons in 2014, the largest restaurant buyout to date.
It would also be the latest mega-deal in a boom in mergers and acquisitions, as U.S. companies try to take advantage of U.S. President Donald Trump’s light-touch antitrust regulation.
A deal would create a combined company with revenue of nearly $50 billion last year. Starbucks has about 41,000 owned or licensed stores, two-fifths of which are in the United States. Nearly all of Chipotle’s 4,200 restaurants are in the United States.
Starbucks declined to comment. Chipotle did not immediately respond to a request for comment.
Under Niccol, the coffee chain is in the early stages of a turnaround, called the Back to Starbucks strategy, which is starting to pay off with rising same-store sales and profits.
His plan included adding baristas, introducing new menu items, speeding up service and renovating cafes. He hired two former Chipotle executives, Tressie Lieberman and Stephen Piacentini, to lead marketing and development for the cafe, respectively.
Shares of Starbucks soared 24 percent on the day Niccol’s move to the coffee chain was announced, at a time when its board was under pressure from activist investor Elliott Management to reverse a sharp decline in sales.
Niccol served as chief executive of Chipotle for more than six years, gaining a reputation as a star restaurant executive after masterminding a turnaround of the company following a major food safety crisis. He previously worked at Yum Brands, which owns restaurant groups including the Mexican-themed KFC fried chicken chain and Taco Bell.
He continues to have a home in Newport Beach, Calif., home to Chipotle’s headquarters, where Seattle-based Starbucks has built a satellite executive office.
Chipotle shares have fallen nearly 20 percent over the past year, hit in part by consumer fears after the company last summer pulled jalapeño peppers from a supplier linked to a salmonella outbreak. Chief Executive Officer Scott Boatwright served as Chipotle’s chief operating officer under Niccol.
Additional reporting by Aaron Kirchfeld
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