The ex-Gunners star thinks Jose Mourinho should make a bid in excess of £50m to secure the shock signing of the Chile international.
Sanchez is undecided on his future and has yet to put pen to paper on a new contract at the Emirates.
And Merson thinks if Sanchez moved to United the Premier League title race would a foregone conclusion.
“Manchester United should make a bid of more than £50m for Alexis Sanchez because he could bring them the title,” Merson told Starsport.
“I wouldn’t get too carried away by the way they steamrolled West Ham last Sunday because they are still a player short for me. For the first 25 minutes or so of that game they never looked like scoring.
Manchester United (Odds: 1/3 to win, 9/1 to lose, 4/1 to draw)
“Manchester United should make a bid of more than £50m for Alexis Sanchez”
“It was just like last season all over again. Then a bit of magic and they’re in front. But will they do that every week?
“But if they got Sanchez, I would. He would make a massive difference.
“Arsenal won’t sell him to a rival for £50m but if United offered £60m or £70m he goes. United can afford it as well.
“They would get most of it back in shirt sales.
“They’re one of the biggest clubs in the world and their club shop is the size of a shopping centre. They should go for him.”
Sanchez was in stunning form for Arsenal last season, netting 30 goals and providing 19 assists in all competitions.