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Liverpool FC have been forced to admit defeat in their attempts to sign Barcelona attacker Alexis Sanchez.

The Reds held talks with the talented Chile international and hoped he would agree to be a makeweight in the Luis Suarez deal.

However, Anfield officials have been unable to convince Sanchez to make the move to Merseyside and they are resigned to the 25-year-old joining Premier League rivals Arsenal instead.

Both clubs were willing to match Barcelona’s valuation of around £30million so it came down to the player’s preference.

Sanchez asked for time to consider his options over the weekend and his representatives have now informed Liverpool that he is likely to join the Gunners. They cited the desire of Sanchez's family to live in the capital as key to his decision.

Missing out on Sanchez, who had scored 39 goals in 88 league games for the Spanish giants, is a blow for the Reds as manager Brendan Rodgers believed he would be a perfect addition to the club’s attacking armoury.

It also means that the deal for Suarez is set to be straight cash with Barcelona having already agreed to pay the release clause in his contract of around £75million.

In pictures: Emre Can makes strong first impression as Liverpool FC begin pre-season training

The payment structure is yet to be finalised but with Sanchez no longer part of the equation progress should be swift and the finer details of the transfer can now be completed.

Liverpool are close to wrapping up a £25million deal for Benfica winger Lazar Markovic.

Read more:Lazar Markovic: Who is the Serbian rookie Liverpool are set to pay £25million for?

The young Serbian’s move to Anfield has been given the seal of approval by his national team boss Ljubinko Drulovic.

“It'll be good for him and Benfica,” Drulovic said.

“Going to a very strong league will help him even more to become a major player worldwide.

“He's 20 years old and has a long time to play. Markovic could prove to become a very important player in Europe.”

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