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The Benefits Shake Shack Could Offer McDonald's

There are rumors that McDonald's could buy Shake Shack.

There are some plausible reasons for an acquisition.

But an acquisition is unlikely.

Shares of Shake Shack (NYSE:SHAK) are up 4% this week amid rumors that McDonald's (NYSE:MCD) might be interested in acquiring the company. While we think an acquisition is unlikely due to the firms' divergent strategies and MCD's focus on returning cash to shareholders, an acquisition would make sense for McDonald's in some respects.

Lackluster growth and increased competition from fast casual players have forced McDonald's to revamp its business model. McDonald's wants to be seen as a modern, progressive burger company, and management believes it can create this perception by improving food...


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