The Brazilian has been plying his trade with the Gunners' London rivals since 2013 and has elected to continue his career in the English capital after his contract at Stamford Bridge expired.
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“I believe he’s a player that can really make a difference for us," Mikel Arteta said.
"We have been monitoring him for the past few months, we had a clear intention to strengthen in the attacking midfielder and the winger positions [and] he is a player that gives us a lot of versatility, he can play in three or four different positions.
"He has the experience of everything in the football world but to still have the ambition to come here and contribute to bring the club where it belongs. I have been really impressed with all the talks I have had with him and how much he wanted to come.”
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Expert View - a needless and tone deaf signing
Arsenal have been stung before by offering a large contract to an ageing attacking midfielder and now seem desperate to get Mesut Ozil off their wage bill at all costs.
In Willian, they have signed an even older playmaker and offered him a three-year contract reportedly worth in excess of £30 million to boot.
That this news comes so soon after the Gunners announced the imminent sacking of 55 members of staff, including some long-standing scouts, makes this a tone deaf signing and Willian's relationship with Kia Joorabchian will raise further questions about the Gunners' own dealings with the controversial agent.