Starbucks Explores Chipotle Acquisition as Middle East Expansion Continues

Starbucks and Chipotle could soon find themselves under the same roof, though neither brand currently operates physical branches in Israel. According to a Financial Times report published on Thursday, the coffee giant has been working with advisors in recent months to explore a potential acquisition of the American Mexican-style restaurant chain.

Potential Leadership Reunion and Market Value

This move could reconnect Starbucks CEO Brian Niccol with the company he managed until 2024. Chipotle's market capitalization was reported at approximately $39 billion, though no purchase price has been finalized and the deal may ultimately not materialize.

The Failed Israeli Venture of Starbucks

Starbucks previously had a brief and costly venture in Israel. The chain entered the local market in 2001 in a partnership with Delek Group, which held about 80% of the local operations. The planned expansion ended with just six branches, financial losses, and unsuccessful attempts to sell the business. By 2003, all branches were closed, with Delek writing off approximately 17 million shekels on its investment. Starbucks states on its official website that the partnership was dissolved due to ongoing operational difficulties, denying claims that the exit was politically motivated.

Middle Eastern Expansion and Global Footprint

In the Middle East, however, the two chains share a surprising business link: the Kuwaiti Alshaya Group, which operates Starbucks franchises in the region, is also Chipotle's expansion partner. In October 2024, Chipotle's first restaurant opened in Dubai. By last August, Chipotle reported having 16 restaurants across the United Arab Emirates, Kuwait, and Qatar, and announced its entry into Saudi Arabia.

However, Chipotle's story differs from Starbucks' local failure. Despite operating over 4,200 restaurants worldwide, its operations remain heavily concentrated in North America. According to its August data, the chain had only 21 restaurants in the UK, six in France, and two in Germany. Another detail highlighting the limited nature of its expansion outside familiar markets is Mexico—the country whose cuisine forms the core of the brand—where Chipotle only arrived this year.

As a reminder, Starbucks has found a way to maintain a presence in the Israeli market: the brand's capsules and coffee beans are sold locally, and the company operates a Hebrew-language website. More than two decades after the closure of its physical branches, consumers can still enjoy its coffee at home, but ordering from a barista at a local café requires traveling abroad.