After City improved his contract once more, he'll just stay for another season.
And else, Kompany will be captain and they'll get Higuain or Benz after Real signed Neymar.
Alvarez wanted Inter, considering all the Argies there and Zanetti seems to have worked him over too. Velez S directors and Alvarez' agent said that Inter had had more talks with them than any other team so I am guessing Arsenal were not too high on him, at least not as a much as Inter.
Balza is a definite improvement over Antonini. With the lack of good offer at LB, Balzaretti is one of the better options for Milan, despite not being too sound defensively. More or less a clone of Abate on the other side of the pitch. Milan can afford having Balzaretti when Nesta and Silva are the center backs.