The Gunners have made contact with Real Madrid about a €25m deal for the World Cup winner but the move has stalled and the Blues have now moved for the 27-year-old
Chelsea are emerging as frontrunners in the race to sign Sami Khedira as they step up plans to reinforce their midfield.
The Blues have made contact with Real Madrid about discussing a €25 million deal for Khedira, who has only a year remaining on his contract with the Spanish giants.
Chelsea's move comes as Arsenal's pursuit of the Germany World Cup winner has stalled due to his salary demands. Khedira is believed to be pushing for a €250,000-a-week plus top-up bonuses.
That would make him comfortably the highest paid player at Emirates Stadium, where the top earners are €160,000-a-week duo Mesut Ozil and Alexis Sanchez, but he would fit in with the Chelsea wage structure for A-list players.
Jose Mourinho had made Juventus star Paul Pogba his top target to partner Nemanja Matic in central midfield next season but the Italian club's €75m asking price has put off the west Londoners.
With new signing Cesc Fabregas pencilled in for the No.10 playmaker role next season, Chelsea have begun exploring Khedira as a back-up option to Pogba given his availability and reasonable transfer fee.
Real are willing to offload the 27-year-old for €25m because his contract expires in 12 months' time, when he could leave on a free transfer. The Champions League holders have failed to make any headway in agreeing a new deal with the German and on Thursday completed the signing of his countryman Toni Kroos from Bayern Munich.
Chelsea could be encouraged to bid for Pogba following Antonio Conte's shock resignation as Juve manager earlier this week, although the situation at the Serie A champions is fluid due to doubts about the future of his team-mate Arturo Vidal. It is unlikely that Juve would cash in on more than one of their two prize assets.
Arsene Wenger is ready to pursue alternatives to Khedira as he bids to recruit a proven midfield anchorman this summer, with Southampton's Morgan Schneiderlin among those admired by the Arsenal manager.
The Gunners will imminently confirm the signing of Mathieu Debuchy from Newcastle United for €10m plus add-ons and are closing in on a €4m deal for Nice goalkeeper David Ospina and a season-long loan of Atletico Madrid right-back Javi Manquillo.