The Canada international's contract at Bayern Munich is due to expire next summer, and he is not expected to sign an extension, with the defender therefore preparing to leave Allianz Arena in 2025.
Real Madrid have long been seen as the favourites for Davies, but Man United are believed to have stepped up their interest of late, with the Red Devils thought to view him as their leading left-back target.
Luke Shaw's ongoing injury problems are concerning for the 20-time English champions, and a left-sided defender is therefore said to be a priority for the club in 2025, with suggestions of a January deal potentially being agreed.
However, according to Sky Deutschland, Davies's priority is to make the move to Real Madrid, with Man United now expected to miss out on a deal for the 23-year-old, who has also been linked with Barcelona.
Davies 'to join Real Madrid over Man United'
Davies has made 11 appearances for Bayern during the 2024-25 campaign, providing two assists in the process, but he is seemingly entering the latter stages of his time at Allianz Arena.
The Canadian made the move to the Munich giants from Vancouver Whitecaps in January 2019, and he has represented the club on 206 occasions in all competitions, contributing 11 goals and 33 assists in the process.
Davies will be one of the most attractive free agents on the market next summer, and it is likely that he will come to an agreement with Real Madrid over a pre-contract at the start of 2025 ahead of a move at the end of the campaign.
What is Man United's left-back situation?
Shaw has had a setback in his recovery from a calf issue which has kept him out in the early stages of this season, and it is unclear when the England international will be able to return.
When fit, Shaw is one of the best left-backs in the Premier League, but there is huge concern over his ongoing muscular problems, while back-up left-back Tyrell Malacia has not played since the 2022-23 season due to a serious knee injury.
Malacia is back in training, but a return date has not been set, meaning that left-back has again been a huge problem at Man United this season, with Diogo Dalot, Noussair Mazraoui and Lisandro Martinez all operating in that area.
Davies would certainly be a statement signing for Man United, but unless there is a drastic turn of events, it seems incredibly likely that the Canadian will be making the move to Real Madrid on a free transfer next year.