The Swiss international is contracted to the German outfit for another three years but Gunners boss Arsene Wenger is apparently ready to part with over €40m in order to bring the midfielder to north London.
The report says that Wenger recently met Xhaka’s father as he looks to bolster a much-discussed midfield.
The arrival of Egyptian midfielder Mohamed Elneny in January and the emergence of Francis Coquelin over the last 12 months has solved a few problems in Arsenal’s engine room.
But with the ageing trio of Mathieu Flamini, Tomas Rosicky and Mikel Arteta as well as injuries to the likes of Santi Cazorla, Aaron Ramsey, Jack Wilshere and the aforementioned Coquelin has made Wenger think about bolstering his midfield again in the summer.
Like Elneny, Xhaka plied his trade with Swiss giants Basel before moving to Monchengladbach four years ago, and he has gained many admirers with his impressive passing range.
The 23-year-old is not afraid to get stuck in either, with three red cards to his name this season alone.