Former Liverpool manager Jurgen Klopp, in his role as Red Bull football director, wanted to sign Ellliott for RB Leipzig.
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It would've been the second time Klopp had signed the England international after originally bringing Elliott to Liverpool from Fulham.
However, Villa managed to see off Leipzig's attempts to strike terms with Liverpool for the midfielder.
Elliott joins Villa on an initial loan, with a £35 million obligation to buy agreed between the two clubs, making him a permanent addition to Unai Emery’s squad at the end of the season.