The Blues have beaten French Ligue 1 champions Paris Saint-Germain to the Uruguayan defensive midfielder, who is poised to join them this summer.
Ugarte had offers from both clubs on the table, with PSG offering a higher salary package worth a reported €5 million a year, which put them in pole position to sign him.
Chelsea’s offer was significantly lower, with an opening proposal of a €2m. They subsequently tabled an improved €3.5m a year deal with various performance-based incentives and bonuses.
While it was still lower than PSG’s proposal, Ugarte’s long-term desire to play in the Premier League ultimately prevailed, with the midfielder preferring Chelsea over a move to Paris.
Ugarte has a €60m release clause in his contract which Chelsea will trigger, and the midfielder is set to be the first signing for them ahead of a crucial summer transfer window.
Having splurged recklessly over the last two transfer windows, Chelsea must get it right this summer. Balancing the dysfunctional squad is a priority, and Ugarte could prove a shrewd acquisition.
The former Famalicao man has been a standout performer for Sporting this season, completing the most tackles in the Portuguese top flight, Champions League, and Europa League knockout stages.
He will begin the next phase of his career in the Premier League and could be joined by a new goalkeeper and a striker, with Chelsea keen to strengthen core areas of the squad.
The Blues are still interested in Brighton & Hove Albion’s Moises Caicedo, who has been heavily touted to leave the Amex Stadium this summer.
However, Chelsea must also sell players to avoid Financial Fair Play sanctions.
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