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Real Madrid have agreed a five-year deal with Argentine defender Walter Samuel, the Primera Liga club said on its website on Thursday.
Samuel is set to join the Spanish giants on July 1 from AS Roma.
Financial terms of the signing were not disclosed but sports daily Marca said on its website Real had secured Samuel for 22 million euros ($26.22 million), beating off competition from Chelsea for the powerful 26-year-old who joined Roma from Argentina's Boca Juniors in 2000.
"We have reached an agreement in principle with Roma and with the player and we can finally announce we've signed a central defender, a priority for us for next season," Real Madrid's sporting director-general Jorge Valdano told Realmadrid.com.
Real Madrid will end this season without a trophy despite having a squad including Brazil's Ronaldo, France's Zinedine Zidane, Portugal's Luis Figo and England's David Beckham.
Critics said the squad lacked depth and highlighted the team's weaknesses in defence.
Real Madrid President Florentino Perez pledged earlier this month to sign another of the world's leading players.
Valdano praised Samuel as a "thoroughbred defender" and said he believed he would help develop young Madrid defenders.
"He brings quality and maturity which will help our young players feel more comfortable and play better."
"He fills an important need the team had and does so in style because he is one of the best defenders in the world."
Samuel's wish to play for Real Madrid won through despite interest shown by other clubs, Valdano said.
"He had a special determination and made it felt throughout the negotiations. That gave us an advantage in the fight with other very important competitors who complicated the negotiations at one point. They were rather difficult days, but finally Samuel will be at Real Madrid and there's great satisfaction in the club over the news," he said.
Valdano said Real had learnt a lot from the 2003/2004 campaign. The club had a promising start to the season but a late-season slump erased their hopes of winning the Spanish league, cup and Champions League.
"We will try to have a balanced squad to avoid the problems we suffered in the end this season," he said.
"We are aware of the needs and we are going out right now to fill them so that next season we have more guarantees in all areas and a deeper squad that will help us survive in all competitions and reach the last two months (of the season) wth guarantees to win a trophy."
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