The former Gunners star concedes that he was hoping for a more high-profile signing who can have an impact in the North London club's chase for an elusive Premier League title.
"I thought they would go for a real key signing," Merson told Sky Sports.
"Someone for £30m-odd. I don't think he'll go straight in the team, instead he'll be a squad player for the games coming up.
"It depends how quickly he settles, though."