Starbucks Chipotle Takeover Deal Explored in Record Bid Talk

Starbucks Chipotle takeover deal talks have reportedly been explored by the coffee chain. Such a move could become the largest deal in restaurant industry history. RTTNews reported the story. The coffee giant's own site is the Starbucks website.

Starbucks Chipotle Takeover Deal Is Still Only Exploratory

Starbucks has worked with advisers in recent months on a possible proposal. Chipotle Mexican Grill had a market value of about $41 billion. It is unclear whether Starbucks has made a formal offer. The talks could also fail to produce a deal.

This is a Chipotle Mexican Grill acquisition idea, not a confirmed transaction. Readers should treat the report with care until either company comments.

How Markets Reacted to the Starbucks Chipotle Takeover Deal

Chipotle shares jumped 7.2 percent after the report. Starbucks shares fell 4.4 percent. That values the coffee company at about $102 billion.

A deal would top Burger King's $11.4 billion purchase of Tim Hortons in 2014. That is the current benchmark for restaurant deals. A Chipotle deal would dwarf it by a wide margin.

What a Starbucks Chipotle Takeover Deal Would Create

The combined company made nearly $50 billion in sales last year. Starbucks runs about 41,000 stores. Chipotle operates roughly 4,200 restaurants. Together they would form a very large global restaurant group.

The deal would also reunite Starbucks CEO Brian Niccol with Chipotle. He served as Chipotle's chief executive for more than six years. He led a major turnaround there. Starbucks is now pursuing its own recovery under his Back to Starbucks strategy.

Analysts Question the Starbucks Chipotle Takeover Deal

Analysts have questioned the strategic logic. They see few obvious revenue synergies. Potential cost savings are possible, but they may not be enough on their own.

The outcome remains uncertain. For more industry updates, read the latest restaurant news on HCP.