Starbucks Explores Potential Acquisition of Chipotle in Record-Breaking Restaurant Deal
Starbucks Corporation (NASDAQ:SBUX) has reportedly explored a potential takeover of Chipotle Mexican Grill, Inc. (NYSE:CMG). A deal would value the fast-casual chain significantly higher than its current $39 billion market capitalization. Following reports of the potential tie-up, Chipotle shares rose 7.10% to $32.95, while Starbucks shares fell 3.90% to $89.93.
If a deal is reached, it would easily become the largest restaurant transaction in history. The current record belongs to the 2014 acquisition of Tim Hortons by Burger King for nearly $11.4 billion, followed by the $11.3 billion purchase of Dunkin' Brands by Inspire Brands in 2020. Chipotle initially expanded with the help of McDonald's Corporation (NYSE:MCD), which held a majority stake before Chipotle went public in 2006.
Investors will now watch to see if these early talks progress into a formal agreement. Analysts will also monitor how the market reacts to the potential combination of two massive food service brands. Meanwhile, shares of McDonald's, which fully divested from Chipotle in 2006, rose 2.27% to $236.10.
Key points
- Starbucks has reportedly explored a potential acquisition of Chipotle.
- A final deal would value Chipotle well above its current $39 billion market capitalization.
- The transaction would easily break the record for the largest restaurant acquisition in history.
- Chipotle shares rose 7.10% on the news, while Starbucks shares fell 3.90%.
- McDonald's was previously a majority owner of Chipotle before fully divesting its stake in 2006.
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How we writeDisclaimerQuestions and answers
Is Starbucks buying Chipotle?
Starbucks has reportedly explored a potential takeover of Chipotle, though no official deal has been announced. Any potential transaction would value Chipotle well above its current $39 billion market capitalization.
What is the largest restaurant acquisition in history?
Currently, the largest restaurant deal is Burger King's 2014 purchase of Tim Hortons for close to $11.4 billion. A Starbucks acquisition of Chipotle would easily surpass this record.
Did McDonald's ever own Chipotle?
Yes, McDonald's made an initial investment in Chipotle in 1998 and became its majority owner in 1999, holding about 90% of the company before fully divesting its stake in 2006.