Manchester United have turned down the chance to sign David Villa, the Spain striker, because of the financial restrictions placed upon Sir Alex Ferguson by the club's ruling Glazer family.

Villa, one of the most revered forwards in the world during five prolific years at Valencia, is to leave the Mestalla in the summer and, after initially stating that he wanted to stay in Spain and move to either Barcelona or Real Madrid, has changed his position with information reaching United in the last few weeks that they are his preferred destination.

Ferguson is a long-time admirer of the 28-year-old but Valencia want around £35m to £40m and United's position is that the fee will have to be lowered otherwise it will be financially prohibitive at a time when the club has accrued debts in excess of £700m. This is despite Ferguson's repeated insistence that the balance from the £80m sale of Cristiano Ronaldo to Real Madrid last summer is available, United having already spent £20m.

Instead, United responded to their eliminationfrom the Champions League by announcing that they had agreed a deal with Chivas de Guadalajara to sign the Mexico striker Javier Hernández, dependent on the 21-year-old gaining a work permit.

Hernández, also known as Chicharito or "Little Pea", has passed a medical and becomes the seventh striker on United's payroll alongside Wayne Rooney, Michael Owen, Dimitar Berbatov, Federico Macheda, Daniel Welbeck and Mame Biram Diouf. However, his arrival for an undisclosed fee will do little to dispel growing concerns among United supporters that Ferguson is being deprived of significant transfer funds to bring in a player who can ease the level of dependence on Rooney.

Villa would have been one such man, second only to Raúl in La Liga's list of all-time scorers, and is so intrigued by the possibility of playing in the Premier League he is already taking English lessons. He has also spoken to Fernando Torres, his international team-mate, about Liverpool but accepted they would not be able to afford him. Villa thinks less favourably of Chelsea and Manchester City, the two clubs who would have fewer problems matching the fee.

As well as currently being out of United's price range, however, Villa does not fit the Glazers' policy of avoiding spending large sums on players who are 26 or above and who would, in theory, have little resale value at the end of a four- or five-year contract. The club made an exception for Dimitar Berbatov, who was 27 when he signed from Tottenham Hotspur for £30.75m in September 2008, but that transfer has been described by the chief executive, David Gill, as the last of its kind.

Hernández has scored 11 goals in Mexico's Primera División this season, putting him joint third in the scoring charts, and has won four caps, scoring against New Zealand, Bolivia and North Korea. As part of the deal, United will play a friendly to open the new Chivas stadium in July.

"I am delighted to reach agreement with Chivas to bring in such an exciting young striker, who has been in such prolific form for both his club and his country," Ferguson said. "He will be a great addition to our squad and we look forward to welcoming our first Mexican player in the summer."

"I feel like I am living a dream," Hernández told the club's television station. "All the impressions I have of the club are good and Sir Alex Ferguson is a great person, maybe the best coach in the world."

The signing was announced as Wayne Rooney underwent further tests on the ankle injury he aggravated during the Champions League quarter-final against Bayern Munich on Wednesday. Rooney had initially been ruled out of the match and is in danger of missing Sunday's game at Blackburn Rovers, but Ferguson said he did not regret rushing him back.

"I never force the medical staff into anything," he said. "It is important they make the right decisions about players' fitness. And they made the right decision. The medical staff did not see any problem."

The Football Association has been monitoring the situation closely but, despite Fabio Capello's obvious concerns about seeing his main striker limp off for a second time in eight days, England's management team are said to understand United's position and the reasons for playing Rooney. Capello and his medical team had been aware since last weekend that there was a good chance Rooney could play and that the injury was nothing like as serious as Ferguson had portrayed when he ruled the player out for up to three weeks.

After Wednesday's game Ferguson accused Bayern's players of deliberately targeting Rooney and he was also angered by the way they had surrounded the Italian referee, Nicola Rizzoli, to demand that Rafael da Silva be sent off for a second bookable offence. United's manager described them as "typical Germans" and the Bayern president, Uli Hoeness, condemned those comments yesterday.

"When we lost the Champions League against Manchester United in 1999 we lost like gentlemen," Hoeness said. "We were good and fair losers and I think that's what Manchester should do now. It's an over-reaction on his part, maybe because he is disappointed to lose. Normally he is a fine gentleman but I think what he has said is not right."