Speculation is rife that Arsenal will make a summer bid for Sterling, who Liverpool value to be worth £50 million, with England international Walcott potentially moving in the opposite direction.
But Merson, a former Gunners' star, is firmly of the opinion that Sterling would struggle at the Emirates Stadium.
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Merson: Best deal ever for Liverpool
"If Theo Walcott goes to Liverpool, Raheem Sterling goes to Arsenal and Liverpool get some money, I think Liverpool have had the best deal ever," he wrote in his latest Sky Sports column. “If he goes to Arsenal, will he play? I don’t think he’s an Arsenal player. I don’t think he gets his head up or moves the ball quick enough.”
Several former Liverpool stars - including Jamie Carragher - believe Sterling, who recently conducted a controversial interview without his club's permission, has been badly advised by his agent.
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Merson sees comparisons between Sterling and Sinclair
Merson wholeheartedly agrees with this sentiment and feels Sterling, 20, should accept Liverpool's generous contract offer rather than risk going down the same ill-fated path as Scott Sinclair, whose career has stagnated following his move to Manchester City from Swansea City in 2012.
"It’s unbelievable, Liverpool, one of the biggest clubs in the world are offering him £100,000-a-week and he’s turning it down... not for me,” he added. “I think he’s going to struggle. The fans will be on his back very quickly. He should get his head down and take the money. He’s been badly advised. Actually, badly advised isn’t even the word – it’s worse than that.
“He’s 20 years old and has been offered £100,000-a-week. He’s not looking for his last move – he’s got another two moves left yet only if he fulfils his potential.
“The problem is, these players make wrong decisions. We go ‘where are all our good young English players?’
“They don’t want to be the best they can be. Look at Scott Sinclair, he would have played 30 times for England now if he didn’t go to Manchester City – everybody knew he wasn’t going to play at City. I can see similarities between Sinclair and Sterling.”
Walcott could flourish at Liverpool
Liverpool are under no obligation to sell Sterling this summer - the winger's contract doesn't expire until the summer of 2017 - and manager Brendan Rodgers has made it crystal clear that the youngster will not be going anywhere at the end of the season.
But if Arsenal - or any other interested club - produce an astronomical offer, there's always a chance Sterling could leave Anfield this summer.
Certainly, the chance to sign Walcott in return for Sterling could tempt Liverpool to seriously consider their options.
The 26-year-old might be famed for his blistering pace, but this is a versatile player who can also finish under pressure.
Walcott has scored 72 goals in 294 appearances for the Gunners, but one suspects the former Southampton starlet has the ability to score 15-20 goals every season given the opportunity week-in, week-out.
Furthermore, Walcott has a connection with Liverpool, having grown up supporting the club because of his father.
But does Theo Walcott have more potential to perform more heroics at Liverpool than Raheem Sterling? Tell us in the comments below!
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