Manchester United have lost out to Real Madrid in the race to sign Karim Benzema from Lyon.

A statement on the official Lyon website announced that the striker will cost Madrid €35m initially, which could rise to €41m.

"Some days ago, Karim Benzema informed president Jean Michel Aulas of his wish to join Real Madrid, always his preferred club after OL, sooner than he expected," read the statement.

"The player wished to seize the chance that Real Madrid offered to be one of the major elements in a team that has worldwide players.

"Olympique Lyon accepted the decision of Karim Benzema and negotiated the conditions for a transfer that satisfied both parties.

"The club wishes Karim every success with Real Madrid, which, in pursuit of its ambitious plans on the pitch, benefits from advantages in legislation (e.g. sponsoring and online betting with Bwin), taxation (more favourable tax status for players abroad) and property ownership (a privately-owned, value-generating stadium) that are incomparable with the situation currently prevailing in French professional sports."