Alejandro Garnacho transfer news: Aston Villa sign Chelsea winger on initial loan deal with conditional obligation to buy

Aston Villa have announced the signing of Alejandro Garnacho from Chelsea on a season-long loan.

Sky Sports News understands the deal includes a conditional obligation to buy, which is considered to be easily achievable.

The total package, including the loan fee, is understood to meet Chelsea's valuation. Sky Sports News has been reporting Chelsea wanted £42.6m for the winger.

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Garnacho joined Chelsea last summer from Manchester United for £40m and now departs on loan, less than 12 months after arriving.

Man Utd could be due around £260k if Garnacho joins Villa permanently after they inserted a 10 per cent sell-on clause in their deal with Chelsea.

The Argentina international winger had not reported for pre-season training at Chelsea in order to allow him to pursue a move away.

The deal comes after the two clubs negotiated a British-record transfer fee of £117m for Morgan Rogers to go in the other direction.

Speaking in a statement after the club confirmed the signing, Villa boss Unai Emery said: "We are delighted with Alejandro. He is so talented, young and he showed us his wish to help our project. We are really happy."

Garnacho will wear the No 17 at Villa, the same number he wore for United and Argentina during his eight appearances for the national team.

Why Villa signed Garnacho on loan with an obligation to buy

Analysis from Sky Sports News' James Savundra:

The deal for Garnacho to move from Chelsea to Aston Villa was not a straightforward one.

Both clubs were recently fined by UEFA for breaching financial sustainability regulations. They are walking a fine tightrope to avoid further heavier sanctions. Last year, Chelsea entered a four-year settlement agreement with UEFA and therefore remain subject to UEFA's stricter financial guidelines - despite not being in European competition this season.

Villa banked an enormous profit from the sale of Rogers to Chelsea. A profit which will go a long way to ensuring they are compliant with both UEFA and the Premier League's differing financial constraints this season. But the club also need to rebuild their squad following multiple departures to ensure they are ready to compete on all fronts this season.

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Garnacho was made available for transfer by Chelsea this summer. Villa were looking for a winger. Emery admired the Argentine. A permanent deal would seem straightforward.

However, that would compromise Villa when it comes to securing the huge British transfer-record fee from Chelsea. That's because of UEFA guidelines which - to simplify slightly - deem that two players being transferred in opposite directions counts as a 'player exchange transaction' if a) they are concluded in 45 days of each other and b) have the same or similar payment obligations, deadlines or dates.

If the Garnacho and Rogers deals were deemed as a single player exchange transaction, then Villa's profit would be reduced in UEFA calculations to the net difference in fees. Chelsea were seeking £42.6m for Garnacho this summer. Easy to see how much of a chunk that would take out of the Rogers profit.

So how about a loan with an obligation to buy? A mechanism that allows Chelsea to guarantee a permanent sale while circumventing the player exchange transaction rules. Sadly, that wouldn't work either.

UEFA is clamping down on the multitude of loopholes that previously existed. It deems that if a 'condition is considered to be virtually certain, then the player's registration must be recognised by both clubs as a permanent transfer from the inception of the loan agreement'. Therefore, we'd still have a player exchange transaction.

So, the deal struck for Garnacho to join Villa appears to work for all parties - sort of. Chelsea believe the conditions to make Garnacho's move to Villa permanent are 'easily achievable'.

However, there still remains a small risk for the Blues. There has to be enough jeopardy in the deal to ensure UEFA is satisfied that a permanent move is not a foregone conclusion from the outset. The Blues will hope there's no repeat of what happened to Harvey Elliott at Villa Park last season. A talented player left warming the bench as his main employers watch his future selling price plummet.

Therefore, seeing a resurgent Alejandro Garnacho flying down the left wing in claret and blue will be a good sight for both Villa and Chelsea.