Asked to combine work with competitors, but competitors are under ethical investigation
If there is any kind of ethical problem with the other group, you need to avoid involvement in unethical behavior as much as possible.  Tell the editor that, owing to ethical concerns, you are no longer willing to work with the other group.  You can ask them to consider publishing your work separately, but you should be clear that you would prefer to take your work to another journal instead of combining the manuscripts.