Report: Real Madrid set to finalise two-year contract extension with Pepe

Real Madrid defender Pepe will not be leaving to join Manchester City this summer as he will reportedly sign a new two-year contract extension.

Pepe has evolved as a defender and person under manager Carlo Ancelotti, as the one-time "dirtiest player in the game" has kept his emotions in check and has put in two of the best years of his career, leading the club to reportedly offer the Portuguese international a two-year contract extension.

Pepe's current deal expires in June 2016 and, according to AS, Real Madrid were only set to offer the player a one-year extension, but, due to the player's performance, were forced to reassess and look at tying the 32-year-old down for two more years, extending his contract until June 2018.

While rewarding his recent performance levels, Real have also acted to fend off mooted interest from afar, with the Express among those to suggest that he is a long-standing target for Premier League giants Manchester City and Manchester United.

Despite having one of the most promising young defenders in world football in Frenchman Raphael Varane, Ancelotti has stuck by Pepe when healthy and has seen the goals-per-game average drop considerably.

Pepe has also become one of the more vocal leaders in the dressing room and as fourth captain, has considerable weight with the younger players, something that has also evolved since Ancelotti's arrival.

As the club wraps up the final details of Pepe's deal, Varane will now ponder his future as the 21-year-old cannot afford to remain on the bench behind Sergio Ramos and Pepe for another three years.

However, Ramos' future is still uncertain as the former Sevilla star has outplayed his current wages and is pushing for a contract renewal to raise his salary to those of the top earners at the club, but progress has slowed to a stalemate as they wait until the end of the season.

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