Why a deal could work
Starbucks CEO Brian Niccol speaks during the Starbucks Investor Day event in New York City, U.S., January 29, 2026.
Brendan Mcdermid | Reuters
Starbucks has reportedly explored buying Chipotle Mexican Grill, but investors are split on whether the megadeal would make sense for both companies.
The coffee giant has been working with advisers on a takeover proposal of the fast-casual chain in recent months, the Financial Times reported on Thursday, citing people familiar with the matter.
If Starbucks bought Chipotle, it would combine two of the largest U.S. restaurant chains. With about $31 billion in annual domestic sales, Starbucks is the second-biggest U.S. chain by sales. Chipotle sits in the number seven spot, with more than $11 billion in annual system-wide sales in its home market.
The report sent Chipotle stock up about 6% on Thursday, while shares of Starbucks fell slightly after dropping more sharply earlier in the day. It is not unusual for deal rumors to lower the potential acquirer’s value and increase the target’s share price, but investor reactions show that a prospective takeover comes with pros and cons for each side of the deal.
To be sure, it is unclear if Starbucks will even pursue the takeover. D.A. Davidson analyst Matt Curtis wrote in a note to clients on Thursday that he views the odds of a deal being completed as “relatively low” — about 20%.
A Starbucks spokesperson told CNBC that the company does not comment on rumors and speculation. Chipotle did not immediately respond to a request for comment from CNBC.
Why it makes sense:
1. The Niccol connection
Starbucks CEO Brian Niccol knows more than a thing or two about Chipotle.
Before joining the coffee company in 2024, he was chief executive of Chipotle for more than six years. He led a turnaround of the burrito chain, helping it bounce back from a series of foodborne illness outbreaks that had turned into a full-blown crisis for the company.
In the wake of Niccol’s departure, traffic to Chipotle restaurants fell in 2025, as budget-conscious consumers visited its restaurants less often. These days, the chain looks like it is starting to get back on track, with signs of “encouraging progress,” Chipotle CEO Scott Boatwright said on the company’s earnings conference call in late July.
Still, its shaky 2025 means that the stock is trading at a 20% discount from a year ago, even with Thursday’s big move. And since Niccol left, shares have lost about 40% of their value.
2. Building the next Yum
Chipotle would be a splashy acquisition for Niccol. More than that, it could create a new restaurant conglomerate, following in the footsteps of Yum Brands, Restaurant Brands International and Roark Capital-backed Inspire Brands.
Multi-brand restaurant companies are more diversified, which can be more attractive to investors. While Starbucks is still a much larger chain than Chipotle, the difference in their categories means that one’s poor performance could be offset by growth at the…
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