Starbucks (SBUX) shares fell 0.4% to close at $93.21 on Thursday, while Chipotle Mexican Grill (CMG) stock rose 6% to $32.65 after the Financial Times reported that Starbucks had explored acquiring the burrito chain. The report is available from the Financial Times.

According to the report, Starbucks worked with advisers in recent months on a potential transaction. Chipotle’s market value is approximately $41 billion, compared with roughly $107 billion for Starbucks. Analysts at William Blair estimated that a deal could value Chipotle at about $50 billion.

Starbucks declined to confirm or deny the discussions. A spokesperson said the company does not comment on rumors and remains “laser focused” on its own “Back to Starbucks” turnaround plan under CEO Brian Niccol. Chipotle did not respond to requests for comment.

A connection through Brian Niccol

The potential deal would reunite Niccol with the restaurant company he led for about six years. During his tenure at Chipotle, he guided the chain through food-safety problems and expanded its digital-ordering business. Niccol left Chipotle in August 2024 to become Starbucks’ chief executive.

Several other Chipotle executives have also joined Starbucks. Tressie Lieberman, who previously served as Chipotle’s vice president of digital marketing, is now Starbucks’ global chief brand officer. Stephen Piacentini, a former Chipotle development officer, joined Starbucks in April. Current Chipotle CEO Scott Boatwright was the company’s chief operating officer during Niccol’s tenure.

A merger could therefore bring several members of the former Chipotle leadership team together again. RBC Capital Markets analyst Logan Reich said Chipotle investors would probably view Niccol’s return positively. However, he said the strategic rationale for Starbucks was less clear, noting that investors are often cautious when restaurant chains acquire other brands.

A post from Morning Brew highlighted the potential scale of the transaction:

Starbucks' potential Chipotle takeover would be the biggest restaurant acquisition in history

Chipotle Market Cap:

• $41.5 billion

Largest restaurant deal of all-time:

• Burger King/Tim Hortons (2014) – $11.4 billion

— Morning Brew ☕️ (@MorningBrew) October 8, 2026

https://x.com/MorningBrew/status/2108224969012330802?ref_src=twsrc%5Etfw

At William Blair’s estimated $50 billion valuation, a Starbucks-Chipotle transaction would be more than four times that benchmark — underscoring why the report moved both stocks despite neither company confirming the talks.

Financing and turnaround concerns

The cost of the transaction could be a major obstacle. William Blair analysts described the financing as “tough math” for Starbucks. The company reported $28.2 billion in total assets as of its fiscal third quarter, including $3.4 billion in cash — a modest sum set against a potential price tag near $50 billion. Total assets were down from $32 billion a year earlier.

Lale Akoner, a strategist at eToro, said the acquisition could require substantial borrowing or the issuance of new stock. Without a clear financial benefit, she said investors could regard the deal as an expensive distraction.

Brian Jacobsen of Annex Wealth Management called the timing “a little weird.” Starbucks remains in the middle of a turnaround and has not yet delivered the margin gains investors are seeking. The company’s adjusted operating margin was 14.4% last quarter, down from 16.7% two years earlier, according to LSEG data.

Starbucks has committed more than $500 million to staffing and store upgrades and closed approximately 250 underperforming cafes last month. Analysts also identified a potential sale of Starbucks’ Japan business as one possible way to help finance an acquisition.

Chipotle’s performance has weakened since Niccol’s departure. Its stock rose 928% during his tenure but has fallen 37% since he left, potentially making the company a less expensive target than it would have been a year ago.

The deal could offer strategic benefits beyond the connection between the companies’ executives. Northcoast Research analyst Jim Sanderson said Chipotle could potentially use Starbucks’ licensed partnerships in Europe to accelerate its international expansion. Chipotle opened its first restaurants in Mexico and Saudi Arabia this year, adding to approximately 100 locations outside the United States.

Starbucks operates roughly 40,000 stores worldwide, including about 18,000 in North America. Chipotle had 3,938 U.S. locations as of last year. Starbucks said Thursday that it still plans to report its fourth-quarter results and provide its outlook for the next fiscal year later this month — its first scheduled update since the takeover report surfaced, and the next opportunity for investors to hear directly from management.