Puma have been the kit makers for Arsenal since 2014, but the contract ends next season.
Arsenal have a current deal with Puma that have been providing the club's kits and merchandise for four years.
However, with the existing deal with Puma set to run out next summer, Arsenal are looking towards replacing the kit makers.
Puma’s current deal with Arsenal is estimated to be worth about £30m a season, and are reportedly willing to improve the current terms upon negotiation.
According to a report by the Daily Mail, Arsenal are already in talks with Adidas who are now firm favourites to replace Puma.
Arsenal, however, are obligated to inform Puma of the offers they are negotiating and it is up to them to match up with the competitor's price.
If Arsenal are able to get the new deal with Adidas it will exceed that of rivals Tottenham and Manchester City who have a deal of £30m and £20m from Nike every season respectively.
The proposed new deal for Arsenal will however not match that of Chelsea who get £60m from Nike, nor will it match that of Manchester United who hold the highest kit deal with Adidas worth £75m every season.