Real Madrid are closing on a deal for Penarol midfielder Federico Valverde.

The 16 year-old Uruguayan is also interesting Barcelona and Arsenal, where he spent January trialling.

However, Sport says Real are now well down the road to clinching a deal with Penarol for the midfielder.

Barca's technical chiefs Ariedo Braida and Carles Rexach were both eager to bring Valverde to La Masia, but their transfer ban this summer has thwarted their plans.

Instead, Real are now set to win the race for the youngster's signature, despite Valverde enjoying himself at London Colney during his Gunners spell earlier this year.

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