The highly rated youngster is regarded as one of the most promising talents in Ligue 1 after an impressive breakthrough campaign.
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Last season, he made 19 appearances for Nice, scoring three goals and showing flashes of his attacking potential.
Boudache first stepped onto the professional stage in January, making his debut in the Europa League against Go Ahead Eagles, where he immediately drew attention for his composure and creativity.
Lyon acted quickly to secure his services, completing the deal and confirming his arrival as they continue investing in emerging talent for the future.