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United spent the majority of the summer transfer window pursuing Jadon Sancho, only to see Borussia Dortmund stand firm on their £108million valuation, prompting Ole Gunnar Solskjaer to look elsewhere.
As reported by Standard Sport, United and Liverpool were both interested in Sarr as Watford put a club-record £40m sale price on the player's head.
Liverpool walked away from negotiations but United stepped up talks before also admitting defeat as the transfer window shut.
"We were extremely close, I was personally negotiating with them," Filippo Giraldi told the Here We Go podcast.
"We weren't able to reach an agreement. And I think Ismaila is very young, he will arrive for sure.
"He missed probably an opportunity, but I think also for his football to stay here and get 10 goals and 10 assists, he's deciding the league. I think for Watford in the condition they are at the moment it's luck he stayed.
"I love Ismaila because he has the ability to affect the game every time he plays, and that's quite rare.
"You see fast wingers becoming more and more important in physical leagues like the Premier League. I remember last year against Manchester United and Liverpool, he was the one with Gerard Deulofeu on the other side affecting the game and deciding the game every time.
"This type of player are players you have to try to maximise and protect them as much as you can."