Arsenal Transfer News: Latest Rumours on Alexis Sanchez and Riyad Mahrez

Arsenal will reportedly sell Alexis Sanchez to Manchester City for £35 million in January if they can sign Riyad Mahrez from Leicester City.

The Gunners will only allow the Chilean to join manager Pep Guardiola's side if they can bring in a top-quality replacement and are hopeful they can land Mahrez, per Steve Stammers of the Sunday Mirror.

Mahrez "would welcome a move to Arsenal," but Arsenal may face competition from Liverpool, who are after a replacement for Philippe Coutinho.

The Brazilian has joined Barcelona in a huge deal worth £142 million, per Sid Lowe at the Observer.

There is conflicting speculation over Mahrez's future, and he is reportedly set for a medical at Anfield on Sunday ahead of €55 million deal, per BeIN Sports (h/t Get French Football):

"

Breaking | Riyad Mahrez is set to join Liverpool for €55m on a 4 year deal with a medical tomorrow, according to BeIN Sports FR.

— Get French Football (@GFFN) January 6, 2018"

However, Rob Tanner at the Leicester Mercury has said Liverpool have not been in contact with Leicester about Mahrez.

Sky Sports' Guillem Balague has also said the Reds are not interested in the Algerian:

Mahrez has appeared to be back to his best this season for Leicester, as shown by Opta:

Football writer Ryan Baldi has said he would fit in at most top clubs, including Liverpool and Arsenal:

Liverpool are also interested in Monaco winger Thomas Lemar, and he is said to be their top target to replace Coutinho, per Ian Doyle at the Mirror.

However, manager Leonardo Jardim has said the club's strategy is not to sell major stars in the winter, per FourFourTwo.

Coutinho's sale means Liverpool have the finances to spend big this winter, which could possibly tempt Monaco, although Mahrez looks a far more achievable target.

Michael Regan/Getty Images

However, Arsenal manager Arsene Wenger has said that if he were to lose any of his players in January, he would respond by "bringing in players of top quality," per Tom Allnutt at the Evening Standard.

That does appear to be a slight softening in stance from Wenger, who has previously said Sanchez would stay at the club in January, per Mark Crellin at Sky Sports.

The Chilean will be a free agent in the summer, and it could be that Arsenal are considering cashing in now, to avoid seeing him walk away for nothing when his contract expires.

Arsenal were linked with Mahrez in the summer, but Wenger said "we were never close" but that "I rate him as a player," per FourFourTwo.

Mahrez looks as though he may well be in demand this winter, as he is a proven Premier League performer, capable of creating and scoring goals and could cost just £40 million, per Stammers.