Starbucks SBUX-Q is not buying Chipotle Mexican Grill CMG-N, its spokesperson said on Monday, quashing speculation about what could have been the largest restaurant deal on record.
Shares of the coffee giant rose about 1 per cent in premarket trading, while Chipotle fell about 2 per cent.
A deal would have created a restaurant giant with about US$50-billion in annual sales, positioning it to better navigate uncertain demand from inflation-hit consumers, rising operating costs and the squeeze on profits.
Starbucks has reportedly explored Chipotle takeover
The burrito chain, whose market capitalization is around US$40-billion, did not immediately respond to a Reuters request for comment.
Last week, the Financial Times reported that Starbucks had worked with advisers in recent months on a potential takeover proposal for the burrito chain. The report sent shares of Chipotle up more than 7 per cent and Starbucks down about 3 per cent.