A big crash with 3.5km to go saw a lead group of about 30 riders form with yellow jersey holder Mathieu Van der Poel at the helm as the pace increased along with the tension as the finish in Pontivy approached.
The final sprint saw a tight group come together with the riders right on each other's wheels, and it caused carnage around the final bend as Ewan went sliding into Sagan and the two crashed hard on to the road, allowing Merlier to cross the line first followed by teammate Jasper Philipsen in second and Nacer Bouhanni (Arkea-Samsic) in third.
Ewan crossed the line and was taken to hospital for treatment following the crash as Lotto Soudal later announced the unfortunate news that the 26-year-old had abandoned the race with a collarbone fracture.
Merlier, unaware of the extent of the crashes behind him, was overjoyed to win the stage, the first of his career, the second for the Alpecin-Fenix team so far in the Tour.
"I'm living a dream," Merlier said. "After the Giro I was already very happy, but now to win a stage at the Tour, the biggest race in the world... I can't believe it. It's really a dream."
The Belgian couldn't believe van der Poel wanted to lead him out but was glad he did, in a move executed to perfection alongside Philipsen.
"He [van der Poel] said he was going to do the lead-out and I said 'you are crazy', but he loves to do it," Merlier said.
"It was a great lead-out, and I just needed to go the last 150 metres. When I looked over I couldn't believe there was no-one on my wheel."
Van der Poel kept the maillot jaune with an eight-second lead on Julian Alaphilippe (Deceuninck-QuickStep), the Frenchman only one of two GC contenders to avoid losing time along with Richard Carapaz (INEOS Grenadiers).
Earlier in the stage, it was a five-man breakaway formed just a kilometre out of Lorient as KOM jersey holder Ide Schelling (BORA-Hansgrohe) lead an attack followed by Cyril Barthe (B&B Hotels KTM), Michael Schär (AG2R Citroen), Jelle Wallays (Cofidis) and Maxime Chevalier (B&B Hotels KTM).
As the roads became slippery due to rain 37 kilometres in, the race saw another crash at the front of the peloton with INEOS Grenadiers co-leader Geraint Thomas going down hard along with teammate Luke Rowe and Jumbo-Visma riders Tony Martin and Robert Gesink.
Thomas reacted gingerly after the crash, wincing in pain while being inspected by team doctors as it was later reported on race radio that the 2018 Tour de France champion had dislocated his shoulder. The Brit wasn’t going to let it end his campaign though as he hopped back on the bike and rejoined the peloton with the shoulder popped back into place, while the same couldn’t be said for Gesink whose injuries forced him to abandon the race.
Schelling took yet another point in the KOM race as the first to pass the summit of the category 4 Cote de Cadoudal, the growing fan favourite celebrating with a cheeky wink to the camera as he called it a day with his job done.
The intermediate sprint at La Fourchette saw Barthe take the maximum 20 points at the head of the breakaway with Ewan the fastest of the chase group, nabbing another 11 points ahead of Deceuninck-QuickStep teammates Mark Cavendish and Michael Morkov and Sonny Colbrelli (Bahrain Victorious).
The peloton began to ramp up the intensity as they crossed into La Blavet with 25km to go with sprint favourites Peter Sagan (BORA-Hansgrohe), Tim Merlier (Alpecin-Fenix), Mads Pedersen (Trek-Segafredo) and Ewan moving into position behind their lead-out men at the helm.
Chevalier was the first of the breakaway to be caught with 12km to go, as Team DSM took to the front of the peloton led by Tiesj Benoot.
A huge potential shake-up to the GC race happened with ten kilometres to go, as 2020 runner up Primoz Roglic (Jumbo-Visma) was sent flying off his bike in a nasty looking crash. The Slovenian looked very uncomfortable as he swapped bikes, desperately trying to catch up to the peloton alongside his teammates.
With the other riders caught five kilometres from the finish and the peloton picking up serious speed, a tight corner saw another bad crash with Aussie Jack Haig (Bahrain Victorious) one of the casualties, staying down on the ground in serious pain with the team later announcing he had been forced to abandon the race.
The last kilometre saw the chaos unfold with Ewan fighting to get around Sagan and ultimately undoing the pair's chances of the stage win, as Merlier surged through ahead of Philipsen to take the victory on what turned out to be a brutal day of racing.
The Tour de France continues tonight with Stage 4 from Redon to Fougeres and you can catch all the action LIVE on SBS and SBS On Demand from 9:30pm (AEST), with SKODA Tour Tracker App starting from 9:15pm (AEST).