Chelsea have set their sights on Atletico Madrid striker and Arsenal target Diego Costa, with hopes fading over a possible deal for Manchester United’s Wayne Rooney, according to the Daily Star.

Rooney has been a long-term target for Jose Mourinho, but now looks set to stay at Old Trafford.

The England man feels increasingly valued having been trusted with top secret transfer information, and although his contract expires in 18 months, United chiefs are confident he will sign a new deal.

That means Mourinho will turn his attentions to Arsenal target Costa in the summer.

Costa has been watched by the Blues for months, who reportedly lodged a fresh enquiry regarding his availability this week.

The Atletico star is reportedly a top transfer target for Arsenal, and is said to have a £32million buy-out-clause in his contract.

Manchester United have also been linked with a move, while Liverpool saw a bid for his services rejected in the summer.

Costa has fired 23 goals for Atletico this season, although he has failed to find the net in his last four, as speculation continues to mount over his future.

Chelsea feel they may be in pole position to land the Brazilian born Spanish forward, as Jorge Mendes is the agent for both Mourinho and Costa.

The Blues also enjoy a good relationship with Atletico, having loaned them the highly rated Thibaut Courtois for the past three seasons.

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