Starbucks formally announced that it had no intention of acquiring Chipotle. In response, Chipotle shares, which had risen on the acquisition reports, plunged, while Starbucks shares rebounded.
On the 12th local time, Starbucks announced that it had no intention of acquiring Chipotle. Following the Financial Times’ report of a potential acquisition, speculation had spread through the market, but it remained unclear whether a formal acquisition proposal had been made.
The acquisition speculation attracted market interest partly because Starbucks CEO Brian Niccol had previously led Chipotle. If the two brands were combined, the deal could become one of the largest M&A transactions in the restaurant industry’s history.
In the immediate market reaction, Chipotle shares rose more than 7% immediately after reports of the acquisition speculation, but fell about 4% following the denial, returning to their pre-report level. Starbucks shares, by contrast, rose about 1.5% that day.
Both companies are due to announce their results, and the market is expected to focus on their performance and management strategies. Chipotle is scheduled to announce its third-quarter results on 28 October, while Starbucks is also expected to report at the end of the month.