Diego returns to Atletico Madrid
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Atletico signed the Brazilian midfielder on loan from Wolfsburg until the end of the season. Diego previously played under coach Diego Simeone during the 2011/12 season, helping Atletico win the Europa League title that season.
Diego said he was overwhelmed by the return to Atletico as it bids for a first league title since 1996, while also competing in the knockout stages of the Champions League and the Copa del Rey.
''It was only a matter of time before Atletico got to where it is,'' Diego said. ''I had already seen the potential of this team and this club when I was here before.''
Diego's arrival meant midfielder Oliver Torres' playing time was certain to dip, so Atletico loaned the promising teenage talent to Villarreal.
With neither Barcelona nor Real Madrid making any last-ditch transfer moves, Valencia took the spotlight as it looks to turn around a bitterly disappointing season that has left it 17 points adrift of the Champions League places.
The club unloaded a handful of underperforming players - including Argentina midfielder Ever Banega - and added several recruits, including former Barcelona midfielder Seydou Keita.
Valencia was active from Thursday when it signed Keita and striker Eduardo Vargas from Napoli while loaning out forwards Dorlan Pablon, Helder Postiga, and Andres Guardado.
On Friday, Valencia added Cruzeiro striker Vinicius Araujo to its attack alongside Vargas after signing the Brazilian to a reported five-year-deal.
Valencia also rid itself of a pair of underperforming midfielders as Sergio Canales joined Real Sociedad in a reported 3.5 million euros ($4.7 million) deal. Banega, whose career at Valencia has been riddled with problems, joined Newell's Old Boys on loan until the end of the current season.
Valencia also signed Swiss defender Philippe Senderos from Fulham, while midfielder Ricardo Costa's move to Turkish club Besiktas fell through, however.
Rayo Vallecano signed Inter Milan's Samule Longo, Granada landed Brazilian striker Welliton from Spartak Moscow, and Levante signed former Liverpool midfielder Mohamed Sissoko, a free agent, after Valladolid balked. Valladolid instead signed former Barcelona winger Jeffren Suarez from Sporting Lisbon.