Arsenal have made progress in their attempts to sign Manchester City full-back Joao Cancelo, according to a report.
The Portugal international was surprisingly shipped out to Bayern Munich on loan for the remainder of the 2022-23 season in January, having lost his place in the XI under Pep Guardiola.
Bayern possessed the option to make Cancelo's stay permanent for a €70m (£60m) fee, but the Bavarians deemed the clause too expensive, and the 29-year-old is set to return to the Etihad this summer.
Cancelo departs the Allianz Arena as a Bundesliga champion, having come up with one goal and six assists in 21 matches for Thomas Tuchel's side, but he apparently does not have a future at Man City.
Barcelona boss Xavi has confirmed that his side are interested in a deal for Cancelo as they search for a new right-back, but Arsenal are also believed to be keeping tabs on the situation.
According to Football Transfers, the Gunners have been in talks with Cancelo's entourage, and the negotiations are progressing nicely, but Arsenal must still agree a fee with Man City.
The report adds that Mikel Arteta's side are readying an opening bid of £35m, but Man City are expected to hold out for at least £45m, and there are concerns that the Citizens could be reluctant to strengthen one of their title rivals further.
City allowed Gabriel Jesus and Oleksandr Zinchenko to join Arsenal last summer, and despite a few injury problems, both men immediately became fundamental cogs in Arteta's system.
Guardiola's side eventually pipped Arsenal to the Premier League crown, but the champions may think twice before allowing the Gunners to poach more fringe players in future windows.
Before falling out of favour under Guardiola, Cancelo shone in an inverted position akin to the role Zinchenko has thrived in for Arsenal, making the PFA Premier League Team of the Year for the 2020-21 and 2021-22 seasons.
The former Juventus man has registered nine goal and 22 assists in 154 matches for Man City, but he was booed by Citizens fans during Bayern's Champions League quarter-final with his parent club.
Cancelo could arrive at Arsenal as a replacement for Kieran Tierney, who is likely to be sold after being demoted to second choice behind Zinchenko in the 2022-23 season.
At one stage, Man City were said to have been tracking the Scotland international, but Newcastle United are now thought to be in the driving seat for his signature, while Aston Villa boss Unai Emery is also keen on a reunion with the Gunners left-back.
On the opposite side, Arteta is supposedly keen to revert Ben White to a central role despite his success out wide, and with Cancelo capable of playing on either flank, he could therefore become Arsenal's first-choice right-back from next season.
As well as Cancelo, Arsenal are said to be going head-to-head with Barcelona for the signature of Ilkay Gundogan, who is out of contract at the end of the month but is yet to make a decision on his future.
