Pep Guardiola is keen to add a world-class striker to his ranks and is open to the idea of reuniting with Sanchez, who he previously worked with at Barcelona.
Now under contract with Arsenal till next summer, contract talks between Sanchez and the normally-tight-fisted Gunners have reportedly stalled.
Bayern Munich are preparing one of their biggest financial packages ever to try and win the race for Arsenal superstar Alexis Sanchez.
For now, I'm focused on the Confederations Cup in Russian Federation and trying to do well.
Sanchez came on as a substitute in the 1-1, and with his first touch swung in a cross for Mauricio Isla to score the opener.
The Gunners made a last-ditch effort to convince Sanchez to sign a new deal earlier this month, tabling a three-year deal worth £275,000-a-week.
They will be loath to lose one of their key men to a domestic rival - but may decide to cash in should the right offer arrive.
In total, Sanchez scored 30 goals in 51 appearances to finish as Arsenal's top scorer.
But following a season of uncertainly at the Emirates it looks increasingly likely that Sanchez's last act in an Arsenal shirt will have been lifting up the FA Cup at Wembley on Saturday.