A burrito alongside your coffee, perhaps? Chipotle’s stock climbed sharply on Thursday after The Financial Times reported that Starbucks has been investigating a potential acquisition of the Mexican fast-casual restaurant chain. It remains unclear whether Starbucks has made a formal bid or where its plans stand regarding purchasing the company, according to the FT.
Chipotle shares surged up to 8% on the announcement before retreating some of those gains. Meanwhile, Starbucks stock fell as much as 6% during the trading session.
Such a merger would unite two of the most prominent and recognizable brands in America’s casual dining landscape, with Chipotle valued at approximately $41 billion and Starbucks holding a market capitalization exceeding $103 billion as of Thursday.
This acquisition would also represent Starbucks CEO Brian Niccol taking the helm at his previous company. Niccol served as Chipotle’s CEO from 2018 to 2024.
Since Niccol was revealed as Starbucks’ new CEO in August 2024, the two companies’ stocks have moved in opposite directions.
Starbucks shares have gained 19% since his appointment, though they’ve underperformed compared to the broader market, where the S&P 500 has risen 42% in the same period.
Chipotle, on the other hand, has faced significant challenges. The stock has dropped 41%, weighed down by factors such as decelerating revenue growth, increased input costs, and recent public health issues, including a Cyclospora outbreak that significantly reduced foot traffic at fast-casual dining establishments this summer.
Both Starbucks and Chipotle did not immediately respond to a request for comment from Themoneytimes.