Chipotle jumps 8% on report of Starbucks takeover interest

Shares of Chipotle jumped as much as 8% on Thursday before paring gains, following a Financial Times report that Starbucks has explored an acquisition of the chain. Shares of Starbucks fell as much as 6% and also pared moves as investors assessed the news.

The Financial Times reported that Starbucks has worked with advisers in recent months on a proposal for Chipotle, which currently has a market value of nearly $39 billion. Earlier speculation reported by Semafor had been largely dismissed by the market. The status of the plans remains unclear, including whether Starbucks has made a formal offer.

A deal would reunite Starbucks CEO Brian Niccol with Chipotle, which he led for six years before leaving in August 2024. Chipotle shares have nearly halved in value since Niccol departed.

The combination would create a company with nearly $50 billion in combined annual sales based on last year's figures. Starbucks operates about 41,000 stores globally, with roughly two-fifths in the United States. Almost all of Chipotle's roughly 4,200 restaurants are domestic. If completed, the transaction would surpass Burger King's $11.4 billion purchase of Tim Hortons in 2014 as the largest restaurant-sector deal on record. Starbucks declined to comment, and Chipotle did not immediately respond to inquiries.