Mergers have a failure rate that, according to some estimates, run as high as 85 per cent.

No surprises then that less than nine years after the so-called "merger of equals", the $40 billion DaimlerChrysler merger has gone horribly wrong and Daimler is now planning to offload Chrysler.

All this points to an admission of appalling corporate failure. When the merger was announced the chairmen of the companies said it would create the world's biggest car-maker. Now it's a dog.

So what went wrong? A good analysis in The Economist.

DaimlerChrysler was a disaster waiting to happen because it was a cultural mismatch and because Chrysler kept producing cars that no-one was buying, turning the American side of the company into a giant black hole. The Economist sums it up thus:

"It did not help that Mercedes never fully integrated with Chrysler, for fear of tainting the cherished German brand. It shared some technology, but did not allow Chrysler to piggy-back on its basic designs. Many ask whether Chrysler might have fared better in different hands.

"But Chrysler's managers also made mistakes. They kept production high, even as sales stalled. No one flying into Motown last year could miss the fields of unsold Jeeps and Ram pickups. It was the discounts offered to get this stock moving that caused the financial meltdown."

And of course, there were warnings at the time.

This one, from finance writer James Surowiecki, is quite prescient.

"Certainly 'synergy' is the word on the lips and the word processors of everyone who has commented on the deal. But not all these commentators seem to understand what synergy means. For instance, there's very little overlap between the product lines of the two companies. Chrysler sells SUVs, minivans, trucks, and mass-market cars. Mercedes sells luxury sedans and sports cars. This doesn't mean synergy is automatic. All it means is that the two companies are complementary, that there are no redundancies. And while DaimlerChrysler will be able to offer cars to the full spectrum of buyers, the current lack of overlap also means there aren't any easy cost savings to be found by eliminating duplication. It also means the deal's effect on the overcapacity problem will be negligible, unless you believe Daimler is going to cut back on production of its E-class sedans because it's also making the Dodge Neon.

"If being the biggest company was a guarantee of success, we'd all be using IBM computers and driving GM cars. Daimler-Benz and Chrysler were great companies on their own, productive and profitable, making quality cars that people wanted to buy. Now they're risking that present for an Ozymandian future, at the cost of billions of dollars. Size matters, but sometimes for all the wrong reasons."

Now the question is who picks up the pieces? Merrill Lynch reckons General Motors has a 50 per cent chance of buying Chrysler, according to Bloomberg and certainly it's been running the ruler over Chrsyler. More from BusinessWeek.

But is GM really in any condition to buy? Why don't you ask the company's chairman Dr. Dieter Zetsche (aka Dr Z) at his personal website www.askdrz.com. Read the questions he's been asked and none seem to ask about how the company will be broken up. Funny that.

Just another disastrous takeover that the market fell for, hook line and sinker.