Starbucks Explored a Takeover of Chipotle, per FT
Starbucks reportedly explored a takeover of Chipotle with advisers. The combination would be the largest restaurant deal ever, topping $11.4 billion.
A blockbuster restaurant combination
Starbucks has explored a takeover of Chipotle, according to the Financial Times, in what would be one of the biggest restaurant deals ever attempted.
The coffee giant reportedly worked with advisers on a potential acquisition of the burrito chain. The FT cautioned that a deal of this size may never happen, but the talks alone moved both stocks sharply.
Why the numbers are staggering
Chipotle is worth roughly $39 billion, and its shares jumped more than 6% on the report. Starbucks shares fell nearly 5% as investors weighed the cost and complexity of swallowing a company that large.
A combination would unite two restaurant giants into a company with nearly $50 billion in annual sales. It would top Burger King's $11.4 billion purchase of Tim Hortons as the largest restaurant deal in history.
The connection runs through the C-suite: Starbucks CEO Brian Niccol ran Chipotle from 2018 until August 2024, when he left to take the top job in Seattle.
What comes next
Neither company has confirmed the talks, and exploratory work with advisers often ends without a bid. But the report signals that Starbucks is thinking big as it tries to revive growth, and Chipotle's premium valuation makes it an expensive target.
Bankers will be watching whether other suitors emerge or whether Starbucks walks away from the idea entirely.
Do you want to see how to make more plays? Do you want to find gains yourself? Unusual Whales helps you find market opportunities through our market tide, historical options flow, GEX, and much, much more. Create a free account here to start conquering the market with Unusual Whales
Options market and stocks to watch
Takeover chatter is rocket fuel for options volume. CMG calls likely saw heavy action on the 6% pop, and any confirmation or denial from either company would swing the stock hard in both directions. Watch call skew in near-dated expiries for signs traders are positioning for a bid.
SBUX is the trickier side: acquirers usually fall on big deals, and the nearly 5% drop shows the market is skeptical. Put buyers may keep pressing if Starbucks confirms it is pursuing Chipotle.
A deal this large would also reprice the whole restaurant sector as investors hunt for the next target. Names like DPZ and YUM could see sympathy flow. Follow the latest on the Unusual Whales news feed.
Want more market intelligence? Create your free Unusual Whales account for options flow, market tide, GEX, and the full toolkit.