The Times is reporting that the Gunners are keen to sign the 22-year-old attacker to bolster their attacking options under Spanish head coach Unai Emery.
The same article states that Arsenal will face competition from their north London rivals Tottenham Hotspur, who are also interested in the Lille sensation.
According to the same story, the French club value Pepe at around £27m after the winger’s impressive start to the Ligue 1 campaign.
Arsenal are looking to add more depth up front following Danny Welbeck’s ankle break in a goalless draw with 10-man Sporting Lisbon in the Europa League earlier this month.
Pepe has earned rave reviews in Ligue 1 this season after firing Lille into second place in the French top flight ahead of Lyon and Montpellier in the race to finish behind Paris Saint-Germain.
The Ivory Coast international has scored eight goals and has made five assists in 13 games in Ligue 1 this season to hit the ground running in the 2018-19 campaign.
Pepe has also netted three times in eight appearances for the Ivory Coast national team, making his debut in a goalless draw with France on 15 November 2016.
Arsenal are in fifth place in the Premier League table and three points behind Tottenham in the final Champions League spot.
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