Arsenal revitalise interest in Diego Costa

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Arsenal are still interested in signing Diego Costa but will have to beat Chelsea if they want him at the Emirates Stadium next season, reports the Daily Telegraph.

The Gunners are set to hand Arsene Wenger the biggest summer transfer budget in the club's history this summer, thought to be as much as £100m.

As more money from television comes in and major new sponsorship deals are signed, Arsenal are once again in a position to compete with their Premier League rivals for transfers and Atletico Madrid striker Costa remains high on Wenger's list.

Reports earlier this month suggested that Wenger had ended Arsenal's interest in Costa after Arsenal scouts came back unimpressed in the Brazilian-born striker. But Costa has continued his impressive scoring run in La Liga and now has 25 goals in 29 games - second only to Cristiano Ronaldo.

That has been enough to convince Wenger to revitalise his interest in Costa but faces a battle with Chelsea, who are believed to be in advanced talks over a £40m transfer.

Jose Mourinho is keener than ever to sign a world-class forward as he looks to completely change around Chelsea's forward line next season. Fernando Torres is set to leave the club either on loan or permanently while Samuel Eto'o will not be offered a new contract.

Demba Ba and Romelu Lukaku also continue to be linked with an exit from Stamford Bridge, leaving Mourinho with no recognised strikers. That may explain why the Special One has moved so early for Diego Costa, with talks thought to be in an advanced stage.

They also hold an ace up their sleeve with regards to negotiations with Atletico. The Spanish club are keen to retain the services of Chelsea goalkeeper Thibaut Courtois and any deal could involve the Belgian staying at the Vicente Calderon either permanently or on loan.

However, thanks to financial fair play stipulations, Arsenal are now in a position to compete with Chelsea financially proven by their acquisition of Mesut Ozil from Real Madrid last season.

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