Arsenal confident Walcott will be part of £25m investment in future

Theo Walcott, regarded as the most exciting talent in European football, is expected to sign for Arsenal on Monday to complete a spectacular foray into the transfer market by Arsène Wenger.

Suddenly a new Arsenal is beginning to take shape with Wenger acquiring Walcott, judged the natural successor to Thierry Henry, after yesterday completing deals for £7m striker Emmanuel Adebayor and midfielder Abou Diaby, who will cost an initial £2.5m, and who Wenger likened "in stature" to Patrick Vieira.

Wenger could barely conceal his delight at the coups, although he only confirmed the signing of 19-year-old Diaby from Auxerre had been agreed. "I wanted to add some power and size to the squad," he said, promising that next season "we will be in a position to challenge" Chelsea. The total cost for all three players could rise to around £25m.

The details of the deal to buy 16-year-old Walcott are still to be fully finalised but last night sources said they were "80 per cent there". Walcott is in the squad for Southampton's game against Queen's Park Rangers today but is due to sign for Arsenal after the weekend. Talks were put on hold yesterday because the Southampton chairman, Rupert Lowe, was out shooting game.

Arsenal are expected to pay an initial £5m plus a further £5m based on appearances and other add-ons. Southampton are hoping to take the striker back on loan for the rest of the season and Wenger said yesterday that he would agree to that "if it was a deal-breaker". However, it's thought that he is so excited by Walcott's potential that he wants the player immediately.

Arsenal have beaten off fierce competition from Chelsea, Tottenham Hotspur, Liverpool and a late intervention yesterday from Manchester United to secure Walcott who is not due to sign professional terms until his 17th birthday in March. His contract with Arsenal, as per Football Association rules for a player of his age, will take him up until the summer of 2008 but there will also be a lengthy option.

Wenger claimed yesterday that "we are not at the numbers suggested" over the deal and that Arsenal "are not in advanced negotiations at all". However, he declared that Walcott "had the potential certainly" to emulate Henry, who is the young striker's hero. "He's not a bad role model for him," Wenger said. "The talent is there. But the kick after 18, 19 is the mental side. To get the chance to come and develop."

Wenger has clearly impressed the player's family and advisers enough to convince them that Arsenal is the best place for his development.

"I like the timing of his runs, his determined attitude," Wenger said. "He shows composure in decisive moments." Walcott's "electric pace" and determination were also praised.

It is understood that more lucrative offers came from other clubs, not least Chelsea, but for football reasons Arsenal has been chosen. Although Walcott, who is officially still a scholar, has signed a pre-contract agreement with Southampton he is entitled to negotiate with other clubs. Southampton risked any deal going to a tribunal and despite Walcott's undoubted talent and potential, he has not yet played in the Premiership, has made just 12 Championship starts, and is unlikely to have cost more than £1m. Arsenal, however, want to negotiate the smoothest, least controversial deal possible while Walcott's family and advisers are keen for Southampton to be paid a fair price.

It is highly unusual for Wenger to make such investments in the January transfer window, although he brushed aside suggestions that his spending was part of the negotiations to persuade Thierry Henry to sign his new contract and convince Ashley Cole to stay.

Instead Wenger said he had been presented with special circumstances. "I could not let the opportunity pass," he said in reference to Diaby, who has also chosen Arsenal ahead of Chelsea. "I'm very happy that he chose us," Wenger said. "He certainly feels he will get the opportunity to play here."

The Auxerre vice-president, Gerard Bourgoin, said: "It was a choice that belonged to the player. But Wenger has been better than [Jose] Mourinho, that is all."

Arsenal also last night completed the transfer of long-term target Adebayor from Monaco. Wenger compared the 6ft 3in Togalese striker to Nwankwo Kanu. "He has qualities we do not have in the squad," Wenger said. "He's strong, he's good in the air, he makes good runs."

Adebayor, who is 22 next month, has fallen out with Monaco and is available following the French club's signings of Christian Vieri and Marco Di Vaio. He will, however, have to wait to make his debut as he is in the Togo squad for the African Nations Cup. "He has big experience and has played in big games, the Champions' League and had three seasons in France and he is at a good age," Wenger said.