Why a Starbucks takeover of Chipotle would — and wouldn't — make sense for both companies

Livestream Menu Starbucks has been working with advisers on a takeover proposal of Chipotle Mexican Grill in recent months, the Financial Times reported. If the deal happens, it would combine two of the nation's largest restaurant chains. But the potential takeover comes with pros and cons for investors of both companies. SBUX CMG Starbucks CEO Brian Niccol speaks during the Starbucks Investor Day event in New York City, U. 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. With about $31 billion in annual domestic sales, Starbucks is the second-biggest U. 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. 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. 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.