Since the summer, it was expected that Sanchez would link up with Pep Guardiola at the Etihad Stadium, a manager that the Chilean international has previously worked with at Barcelona.
However, with City unwilling to meet Arsenal's asking price in January, Sanchez appears ready to take the opportunity to move to Old Trafford, with United allegedly ready to give the attacker a huge pay-rise over a four-year period.
In light of the recent developments, Keown has described Sanchez as "the biggest mercenary in football", claiming that playing under Guardiola for a second time would have been a natural fit.
In a Q&A with the Daily Mail, the 51-year-old said: "Sanchez has got to be the biggest mercenary in football. Manchester City have wanted to sign Sanchez since the summer and, if no deal is done in January, they will be waiting for him at the end of the season.
"City would be the natural place for Sanchez to go to develop his football. He has worked with Pep Guardiola before, but for Sanchez, this is clearly not about going to the best team, working with Guardiola and taking his game to another level.
"He has probably thought that he will not get a better offer if he waits until the summer, so he might as well take the best deal on offer now. It has been all about the money."