Chelsea have completed the signing of forward Joao Felix on loan from Atletico Madrid, the club announced on Wednesday.
Atletico also confirmed that the forward extended his contract with LaLiga for a further season, until June 2027 -- a way to help the club remain inside the league's salary cap.
Sources told ESPN the deal's initial loan fee is in the region of £11 million. Arsenal and Manchester United were both offered Felix but were unwilling to meet Atletico's financial demands.
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Felix told the club's official website: "Chelsea is one of the great teams in the world and I hope to help the team reach their objectives, so I am very, very happy to be here and very excited to play at Stamford Bridge."
"From Atletico de Madrid we wish Joao Felix every success in this new professional stage," Atletico said in a statement.
Felix, 23, joins as Chelsea continue to struggle in front of goal, having scored the fewest goals in the Premier League top half.
The forward becomes the fourth signing at Stamford Bridge this month following the arrivals of Benoit Badiashile from AS Monaco, Andrey Santos from Vasco da Gama and David Datro Fofana from Molde.
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"He is a quality player," Chelsea manager Graham Potter said at his Thursday news conference. "He can make a difference in the final third of the pitch. Young, but has obviously still had a lot of really good experience so he is just a quality player who gives everybody a lift."
"We've been aware of it for a while but these things don't happen quickly. Obviously the injuries have maybe sharpened the focus a little bit but still, it is nice to get him here, get him training today. That's positive for us and then we'll see for the game on Thursday. We're still waiting for the confirmation he can actually play but he was around today.
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"It's not for me speculate on [why it didn't work out for him at Atletico]. Sometimes these things happen in football but for us it is about [him being] a good age, a fantastic player and his qualities playing as a second striker in between the lines, making something happen in the final third. So we are looking forward to working with him."
Felix began his career at Benfica, where he quickly became a phenom, making his senior debut in 2018.
In July 2019, Atletico signed Felix for a club-record €126m -- Atletico chief executive Miguel Angel Gil Marin said in December it was the "biggest bet" the club has ever made -- but the forward struggled to make a significant impact.
He has scored 34 times in 131 games for Atletico -- including five goals in 20 games in all competitions this season.
ESPN's James Olley also contributed to this report.