The 21 year-old French international has agreed what could amount to a 41 million euro (£35.8 million) move to Real – who were forced to increase their original offer of 35 million euros (£30 million), even though it was agreed with Lyon on Tuesday evening, after a flurry of activity from United on Wednesday morning.
Once United became aware that Lyon had accepted Real's bid they then submitted an offer of 40 million euros (£35 million). However Benzema was already too far progressed in his discussions with Real, having also spoken to United, and the Spanish club were also willing to add extra payments, depending on targets and bonuses, which meant their bid came in slightly higher than United's. Benzema has agreed a six-year deal.
In a statement on Wednesday, just hours after denying an agreement had been reached, Lyon confirmed the sale. The statement also explains why Benzema is moving now, as it contradicts claims from his agent Karim Djaziri that he wanted to remain at the French club for one more season to protect his World Cup place.
'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. The player wished to seize the chance that Real Madrid offered to be one of the major elements in a team that has world-wide players. Olympique Lyon accepted the decision of Karim Benzema and negotiated the conditions for a transfer that satisfied both parties.'
Benzema joins Cristiano Ronaldo – whose £80 million move from United was completed on Wednesday – and Kaka who was unveiled on Tuesday after his £56 million transfer from AC Milan with Real also confident they will secure Xabi Alonso from Liverpool for around £25million having already signed Valencia defender Raul Albiol.
In losing out on Benzema, Sir Alex Ferguson has failed to secure his No 1 transfer target and a player he has coveted for some time. With Ronaldo gone and Carlos Tevez leaving after refusing to sign a permanent contract, Ferguson has been left short of options. He is pleased to have signed Antonio Valencia and had he kept Tevez then United would not have moved for Benzema. Now Ferguson has to weigh up moves for other strikers or take the risk of promoting younger players such as Danny Welbeck.
Options such as David Villa are also unlikely to be open to United – or Chelsea – as the Spanish international is understood to have opened talks with Barcelona who are hoping to sell Samuel Eto'o to Manchester City and secure Villa as his replacement.
Benzema's move will cast fresh doubt on the future of Klaas Jan Huntelaar at Real. The Dutch international has interested Ferguson in the past and it appears that he, along with former United striker Ruud van Nistelrooy, may be forced out of the Bernabeu. Both players will attract bids from Premier League clubs as will Arjen Robben.