We’re one step closer to the final consolidation of America into a single unified corporation.
On Thursday, the Financial Times reported that centibillion dollar coffee titan Starbucks has explored a takeover of decabillion dollar Chipotle Mexican Grill, in a venti-sized tie-up that would undoubtedly be the largest ever in the restaurant sector.
It’s unclear if Starbuck’s takeover plans are still in the works and if it’s submitted a formal offer to Chipotle. But sources familiar with the matter tell the FT that the café behemoth has been working with advisers on a takeover proposal for the burrito chain for months.
The revelation had a curious effect on the involved company’s stocks. Starbucks’ fell by as much as 6.7 percent, before stabilizing at 0.4 percent down. Chipotle, conversely, shot up by 6.2 percent.
That such a takeover is being considered may be a reflection of the current regulatory climate, with the Trump administration taking a laissez-faire approach to antitrust laws. (Starbucks has a monstrous market cap of roughly $107 billion, and Chipotle is no slouch with a $42.0 billion share of the pie.)
President Donald Trump personally intervened in a Department of Justice case that could’ve resulted in the breakup of the Ticketmaster and Live Nation over live ticket sales. The administration also didn’t stand in the way of Paramount Skydance’s recent $81 billion acquisition of Warner Bros Discovery, consolidating two colossi of Hollywood. (That’s not to mention Trump facilitating a cartel-esque safety agreement between top AI companies to control the pace of model development.)
Experts are skeptical that a takeover between Starbucks, a coffee chain, and Chipotle, a burrito chain, would make much sense.
Sharon Zackfia, an analyst at William Blair, said that it would entail “no obvious revenue synergies,” beyond weird mash-ups like offering customers, say, a grande Iced Pumpkin Cream Shaken Espresso with their guac-laden burrito bowl.
“Investors would likely heavily question the rationale and whether such a move signals that management has less confidence in Starbucks’ future growth prospects,” she said in a note, per the FT.
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