The two clubs are set to duel for one of Germany’s brightest young defenders.
He already has experience in Serie A with Sampdoria, but Shkodran Mustafi may not be done with Italy just yet.
According to Sky Sports Germany, the Gunners are preparing a €28 million offer to convince Valencia to sell. However, the Spaniards have placed a €45 million release clause in order to let the centerback go.
Milan have recently been asking for a loan to buy option, as the cash-strapped Italian side desperately seek reinforcements for the depleted squad.
Alex and Phillipe Mexes left the squad in the summer as their contracts expired. Although it is a big relief to the balance sheet, the financial and ownership crisis of the club have reportedly left them with less than €10 million cash to spend.