Chelsea and Arsenal have been dealt a major blow in their pursuit of 18-year-old Max Meyer, who has signed a contract extension with Schalke.
The promising attacking midfielder had been linked with a £12.5m move to Stamford Bridge - but he now looks set to stay in the Bundesliga after signing a new five-year deal with his current team, which will keep him tied to the German club until 2018.
"It is excellent news for the club," Schalke general manager Horst Heldt told reporters. "Many professionals in the game have predicted a great career in football for him.
"His development in the past few months has been almost breathtaking."
Meyer has scored three goals in 11 Bundesliga appearances this term - and his impressive performances had alerted several of Europe's top clubs.
Heldt confirmed last month that he had heard Chelsea were interested in Meyer, which may have prompted the club to speed up their negotiations with the player and his agent.
However, Meyer made his intentions clear several weeks ago - and even predicted that he would sign a new deal before the end of the new year.
"I'm glad that I'm so popular, but I feel very comfortable here," he told reporters in November. "I hope that an agreement can be reached. I think it will happen this year."
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