We are one step closer to finally consolidating America™ into one unified society.
Thursday, the Financial Times reported that multibillion-dollar coffee titan Starbucks had explored the possibility of buying billion-dollar Chipotle Mexican Grill in a small-scale tie-up that would undoubtedly be the largest ever in the restaurant industry.
It is unclear whether Starbuck’s takeover plans are still underway and whether the company has submitted a formal offer to Chipotle. But sources close to the matter say FT that the coffee giant has been working with advisors for months on a proposed takeover of the burrito chain.
The revelation had a curious effect on the shares of the company concerned. Starbucks fell 6.7 percent, before stabilizing at 0.4 percent. Chipotle, conversely, climbed 6.2 percent.
The fact that such a takeover is being considered may be a reflection of the current regulatory climate, with the Trump administration having taken a laissez-faire approach to antitrust laws. (Starbucks has a monstrous market cap of around $107 billion, and Chipotle is no slouch with a $42.0 billion piece of the pie.)
President Donald Trump personally intervened in a Justice Department case that could have led to the dissolution of Ticketmaster and Live Nation over live ticket sales. The administration also did not stand in the way of Paramount Skydance’s recent $81 billion acquisition of Warner Bros. Discovery, thereby consolidating two Hollywood colossi. (This is not to say that Trump is facilitating a cartel-style security agreement between the biggest AI companies to control the pace of model development.)
Experts doubt whether a buyout between Starbucks, a coffee chain, and Chipotle, a burrito chain, makes much sense.
Sharon Zackfia, an analyst at William Blair, said it wouldn’t result in “any obvious revenue synergies” beyond odd mix-ups like offering customers, say, a large espresso shake with frozen pumpkin cream with their guac-laden burrito bowl.
“Investors would likely question the wisdom of such a move and wonder whether such a move indicates that management has less confidence in Starbucks’ future growth prospects,” she said in a note, according to the newspaper. FT.
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