Bayern Munich believe they have won the race to sign Crystal Palace star Michael Olise as Chelsea admit defeat in their bid to sign a key summer target.

The Blues were among the clubs hoping to persuade the 22-year-old to stay in the Premier League, and had been granted permission by Palace to enter talks with Olise’s representatives.

However, the Blues have decided against pursuing a deal, deciding they are unable to meet the player’s financial demands, and it is now Bayern who expect to snap up one of Europe’s most talented wingers.

It is the second time Chelsea have missed out on Olise, after another failed attempt last summer.

Olise has a release clause in his current contract at Palace but it is believed to have a complex structure, potentially rising above £60m.

It has been suggested that Olise wanted a move to a club in the Champions League and Bayern, now managed by Vincent Kompany, are able to offer that, leaving the likes of Chelsea and Manchester United in a weaker position.

Olise is currently on international duty with France, after being named in the squad for the Paris Olympics later this summer.