The Croatia international, who is a cultured option and a versatile performer in the middle of the park, had previously been linked with Liverpool.
According to the Independent, however, it is Real who are on the brink of completing a move for the 21-year-old.
Italian source Gazzetta dello Sport reported that Liverpool had made an offer for the talented performer in recent months, but that their £17.7 million approach for the player was rebuffed by Roberto Mancini.
Kovacic moved to Lombardy three years ago, and despite taking his time to settle into life at one of Europe’s major sides, he began to demonstrate his class last term.
The Eastern European—had he moved to Liverpool—could have helped fill the void left by the departure of Steven Gerrard, who moved to Los Angeles Galaxy at the end of last season.
Kovacic can be a driving presence in the middle of the match, and also boasts the kind of impressive technical prowess which make a difference for the Reds in the final third.
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However, even though Liverpool may miss out on Kovacic, they could still be set to benefit from the move.
The Croatian’s arrival at the Bernabeu surely renders Asier Illarramendi even more superfluous in Rafael Benitez’s plans, and having been linked with a move to Anfield [Telegraph], he could now be even closer to a switch to Merseyside.