Lyon midfielder, Houssem Aouar, has decided to stay at the club for at least one more season.
Arsenal were desperate to sign Aouar, with Mikel Arteta in need of midfield reinforcements.
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Lyon was open to negotiating a fee for the 22-year-old midfielder, but the Gunners were unable to move players out in time to raise the £40million fee required.
Aouar, who was keen on the move to England, has now shelved his hopes of moving to the Emirates and has informed the Ligue 1 club about his decision.
He outlined three key reasons for his decision: Firstly, the transfer had dragged on for so long and there would not be enough time for the club to sign a replacement.
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Aouar came through the academy and did not want to leave “through the back door”.
Another factor was the European Championships next summer, with Aouar believing he has a better chance of retaining his spot in Didier Deschamps’ squad if he stays at Lyon.
The third and final reason is that he wants to help them qualify for the Champions League this season, having missed out on European qualification last season.