Joao Felix is set to extend his contract with Atletico Madrid before joining Chelsea on loan with no option to buy, with Arsenal unwilling to match the asking price.

Following this week’s reports that Chelsea have a verbal agreement to sign Joao Felix on loan, Matteo Moretto of Relevo writes that the Atletico Madrid player has also agreed to extend his contract in Spain.

Felix already had a deal lasting until 2026, but he’s adding another year to his contract before joining Chelsea.

The Blues also won’t have an option to buy in the deal, so they’ll pay his €11m loan fee plus around €6m in wages purely for the next few months of football.

Fabrizio Romano reports on his YouTube channel that neither Arsenal nor Manchester United were willing to pay as much as Chelsea’s €17m (£15m) to loan Felix.

Todd Boehly’s club were the only side willing to pay an amount Atletico would accept. Ultimately, Felix had no choice over which club he’d join.

Various sources had linked Arsenal with a move for Felix, with the Gunners reportedly pursuing both the Portuguese international and a permanent deal for Mykhaylo Mudryk this month.

But when push came to shove, with Felix’s fee rising to an unreasonable level for just a few months of football, Arsenal opted instead to focus on Mudryk.