Starbucks reportedly explored a Chipotle takeover
SBUX•Starbucks reportedly explored a takeover of Chipotle and worked with advisers in recent months on a proposal. Chipotle has a market capitalization of nearly $39 billion, while Starbucks is worth about $107 billion.
1. Takeover proposal explored
Starbucks has explored a takeover of Chipotle, and worked with advisers in recent months on a proposal, a report said. The potential deal would reunite CEO Brian Niccol with the burrito chain he led before joining Starbucks two years ago.
2. Investor concerns
Analysts said an acquisition would likely be costly for Starbucks, which is investing in a turnaround. One strategist said a deal could require heavy borrowing or issuing shares and that, without a compelling financial case, investors may view it as an expensive distraction.
3. Restaurant footprints
Chipotle had nearly 4,000 U.S. restaurants and about 100 international locations at the end of last year. Starbucks had roughly 40,000 stores globally, including about 18,000 in North America; analysts said a deal could accelerate Chipotle's international expansion.
