Bayern Munich midfielder Luiz Gustavo has dashed Arsenal hopes of making their first significant summer signing by agreeing a deal with fellow German side Wolfsburg and signing a five-year contract.
The Brazilian had attracted interest from several clubs in Europe after falling down the pecking order at Bayern following the arrivals of Mario Gotze and Thiago Alcantara, adding fierce competition to an already talented midfield.
Gustavo had hinted he would be open to the idea of switching Germany for England, but Arsene Wenger's Gunners have yet again been left frustrated after loosing out.
Bayern were said to be holding out for a fee of around £17million, but both clubs have agreed to remain silent about the transfer arrangements.
The midfielder was part of side that won the record-breaking treble last season for Munich and has signed a deal keeping him at the Volkswagen Arena until 2018 - he will be officially revealed later today.
The midfielder is hoping to hit the ground running at Wolfsburg and force his way into Luiz Felipe Scolari's Brazil side ahead of the World Cup next summer with his native country hosting the tournament.
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