Bayern Munich are closing in on the signing of Michael Olise after Chelsea once again admitted defeat in their pursuit of the Crystal Palace forward. Olise is understood to have agreed personal terms, with Bayern expected to meet his release clause of around £55m.

Chelsea made another approach for Olise last week despite the France Under-21 international’s decision to reject a move to Stamford Bridge last summer and sign a new contract at Palace. But after receiving initial encouragement that Olise was open to rejoining the club where he spent seven years as a youth player, Chelsea are believed to have pulled out of the race due to concerns about how much it would cost to complete the signing.

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Suggestions the clause is higher for clubs not in the Champions League would have meant they would have to pay more than £60m for the 22-year-old. Chelsea are playing in the Europa Conference League next season. Olise’s former club Reading are also believed to be due a significant sell-on fee.

Olise, who is preparing for next month’s Olympics, is understood to have agreed a deal worth about £200,000 a week with Bayern, whose officials have a good relationship with Palace’s chairman, Steve Parish. Palace signed the USA defender Chris Richards from Bayern in 2022 but rejected an approach from them for their manager, Oliver Glasner, at the end of the season after his instant impact in south London. Bayern then appointed Vincent Kompany to replace Thomas Tuchel.

Newcastle had also requested permission to speak to Olise, who scored 10 goals in 19 appearances this season and has emerged as one of the brightest young talents in the Premier League. Manchester City and Manchester United have failed to follow their longstanding interest, with Olise now looking set to join his former Chelsea academy teammate Jamal Musiala at Bayern.

Chelsea have also completed the signing of Estêvão Willian from Palmeiras for just over €60m (£50.7m) . The 17-year-old Brazilian attacker, who has become the most expensive teenager in south American history, is due to move to London in the summer of 2025.

Chelsea have also agreed to sign Aston Villa’s 18-year-old forward Omari Kellyman for £19m. Kellyman is rated as a top prospect at Villa Park and is set to undergo a medical before signing a six-year deal.

Kellyman has come up in talks between the clubs over deals for Ian Maatsen, Jhon Durán and Conor Gallagher. Maatsen, the Chelsea and Netherlands left-back, is close to a £37.5m move to Villa, who are also interested in Gallagher.

Chelsea remain in the market for a striker but their move for Durán, the 20-year-old Villa forward, has stalled. Hoffenheim’s Maximilian Beier, who scored 16 goals in the Bundesliga this past season, has emerged as an alternative target and there is interest in Barcelona’s 18-year-old forward Marc Guiu.