Arsenal have made Bayern Munich striker Mario Mandzukic their top striker target this summer after conceding Diego Costa is all but certain to sign for Chelsea.
As reported by the London Evening Standard, Arsene Wenger has dropped his interest in Costa after Arsenal's latest inquiry was met with a negative response.
Atletico Madrid sources told the Gunners that Costa to Chelsea is basically agreed, and the Spanish international should make the move before the World Cup this summer.
Arsenal have retained an interest in Costa since the January transfer window, when they were told that the forward was not for sale. Atletico Madrid were adamant that their top striker would not be sold with the club competing for the La Liga and Champions League double.
But this summer could be a different story, with Chelsea reportedly ready to offer close to Costa's £37m asking price.
As a result, Arsenal have moved on Croatian international Mandzukic. Bayern Munich are ready to move Mandzukic on at the end of the season with Robert Lewandowski set to arrive.
Pep Guardiola often plays a single striker up front, and with Lewandowski's arrival imminent, Mandzukic can expect his playing time to drop next term.
The report claims he's unlikely to get an improved contract offer at the Bundesliga champions, he's currently on £56,000-a-week until the summer of 2016.
And with Guardiola ready to make further additions this summer, Mandzukic and Manchester United target Toni Kroos could be the two big name casualties.
Much depends on Wenger's decision over his future at the club, as he's yet to agree a new long-term contract but the Gunners need at least two new forwards with Olivier Giroud and Yaya Sanogo failing to impress in the absence of strong competition.