Karim Benzema
Karim BenzemaReuters

Arsenal and Liverpool's chances of landing Karim Benzema from Real Madrid have suffered a big setback as the striker has reportedly agreed to extend his contract.

The French international's contract was due to expire next year and both Premier League giants were thought to be keen on procuring his services from the reigning European champions.

However, Spanish newspaper El Confidencial claims that he wants to continue plying his trade at Santiago Bernabeu and has chosen to accept the club's lucrative five-year contract.

The Gunners manager Arsene Wenger has been a long-time admirer of his compatriot and is scouting for a striker to combine with Olivier Giroud.

On the other hand, Liverpool have lost their 31-goal hero Luis Suarez to Barcelona and Brendan Rodgers is looking for another prolific goal scorer to step into his shoes.

Benzema is currently on a holiday following his participation for Les Bleus in the World Cup in Brazil. But he is said to have given his word to the Spanish capital outfit's hierarchy about his intentions to remain in Carlo Ancelotti's squad next season.

The former AC Milan and Chelsea boss will be happy with the 26-year-old's services who scored 24 goals last campaign in all competitions.

The El Confidencial report also states that the former Lyon star will now earn €8m (£6.3m) per year when the contract comes into effect.

The La Liga outfit are also hoping that all the necessary formalities will be completed before Ancelotti takes his side to the USA for pre-season fixtures.

Meanwhile, Rodgers has hinted that there will be more signings at Anfield in the ongoing transfer window. The 41-year-old has already acquired Rickie Lambert, Emre Can, Adam Lallana and Lazar Markovic for nearly £60m.

The former Swansea City boss wants to further strengthen his squad in many areas and is believed to have an additional £75m to spend from Suarez's sale.

"We felt last year we just never had the depth and we are in the Champions League this year, so we have to ensure we have as strong a squad as possible," Rodgers told the club's official website.

"We are getting the right type of player in. But we certainly won't spend just for the sake of spending. It has to be the sort of player who is going to improve us," he concluded.