The Canada international's next career move has been a hot-button topic for a number of months, as his contract at the Allianz Arena expires at the end of the 2024-25 campaign.
Bayern boss Thomas Tuchel is thought to be keen to retain Davies's services, but the defender's salary demands for a renewal have supposedly been deemed unreasonable by the German champions.
As a result, negotiations have hit a brick wall, and rather than risk losing Davies on a free transfer next year, Bayern will bite the bullet and try to sell him this summer if no new terms are agreed.
All of Chelsea, Liverpool and Manchester City have been tipped to bring the 23-year-old to the Premier League, but according to The Athletic, Real Madrid have now taken a major step to ensure that Davies ends up in white.
The report states that Los Blancos have verbally agreed a move with his camp, although it is still not decided whether he will link up with Carlo Ancelotti's side this summer or join when his deal runs out in 2025.
Bayern would be entitled to a fee if Real push through a deal this summer, although given his contract situation and the Bavarians' proposed need to sell, Los Blancos would not have to pay a premium figure.
Alternatively, Davies could follow a similar path to former Bayern teammate David Alaba and join the La Liga leaders for nothing in 2025 — a scenario which the German champions are desperate to avoid happening again.
Bayern are still fighting tooth and nail to keep hold of Davies and have supposedly turned their nose up to signing potential replacements, but Real have supposedly been
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