Arsenal are close to signing a new kit deal with Adidas worth £25 million ($40 million) a year, while the Gunners are chasing the signature of Dinamo Zagreb teenager Alen Halilovic.
The Gunners have been associated with Nike since the mid-90s, with Arsenal's shirts one of the companies' biggest sellers. Nike sells around 800,000 Arsenal jerseys each year - only behind Manchester United and Barcelona.
Arsenal had entered a less-lucrative long-term deal with Nike, in order to generate funds for the Emirates Stadium. However, that contract comes to an end after the 2013-14 season, and according to The Telegraph, Adidas have become the frontrunners.
The German company already sponsor Chelsea, and are looking to add Arsenal to their portfolio in order to dominate the scene in London.
Adidas had pulled out of a deal with Liverpool owing to the demands made by the Reds.
Nike are paying Arsenal around £13 million ($21 million) a year, which means if the deal goes through, the Gunners will double their revenue. Adidas last sponsored Arsenal in the 1990s.
Meanwhile, Arsenal have been linked with teenage sensation Halilovic. According to the media in Croatia, Arsene Wenger is keenly watching the progress of the Dinamo Zagreb playmaker, who at 16, made his Champions League debut against Paris St Germain this week.
Halilovic became the youngest ever goalscorer for in the Croatian league when he scored for Dinamo in early October, while also becoming the youngest ever player for the club, when he made his debut for them in an earlier game.
The 16-year-old is a playmaker, with a wonderful left-foot, which has drawn comparisons to Lionel Messi. Arsenal have also been linked in the past with Mateo Kovacic, Halilovic's teammate at Dinamo. Kovacic, incidentally, has also been compared to Messi as well as Argentine legend Diego Maradona.
