Japan’s Sony Group said on Monday it has sent a termination notice to Zee Entertainment to call off a $10 billion merger of their Indian operations, following an impasse over who will lead the combined entity.

The deal, announced more than two years ago, was perceived as crucial for the survival of the companies in a highly competitive market, given the impending merger between Disney’s Indian businesses and the media assets of billionaire Mukesh Ambani’s Reliance Industries, a Reuters report from New Delhi and Bengaluru stated today.

Sony said it had been “engaged in discussions in good faith to extend the end date but the discussion period had expired without an agreement upon an extension of the end date”.

 “Culver Max Entertainment (CME) today issued notice to Zee Entertainment Enterprises Ltd. (ZEEL) terminating the agreement dated December 22, 2021, to merge ZEEL and CME”,  statement from Sony Pictures Entertainment.

 “Although we engaged in good faith discussions to extend the end date under the merger cooperation agreement, we were unable to agree upon an extension by the January 21 deadline.  After more than two years of negotiations, we are extremely disappointed that closing conditions to the merger were not satisfied by the end date.

 “We remain committed to growing our presence in this vibrant and fast-growing market and delivering world-class entertainment to Indian audiences.”

It cited unmet conditions of the merger agreement as the reason for the termination.

Although Sony did not specify on Monday what conditions were unfulfilled, a stalemate over who will lead the combined company had put the merger in danger.

Zee proposed CEO Punit Goenka, but Sony disagreed in light of a market regulator probe into Goenka.

Sony said it did not expect any material impact on its fiscal 2024 results from the termination as it did factor in the deal to its outlook.

Zee did not immediately respond to Reuters’ request for comment.

On Friday, Zee had said it was committed to the merger and was working to close the deal through “good faith negotiations”. It was seeking to discuss an extension to a Jan. 20 deadline to close the deal.

“A deal collapse will have a negative impact on both parties as they were looking at scaling up in the Indian market which is going through a digital disruption and a potential threat of increased competition intensity if the Reliance-Disney deal goes through,” said Karan Taurani, an analyst at Elara Capital.

The cash-strapped local broadcaster is also contending with declining profits, advertising revenue and cash reserves in a market where global streaming giants such as Netflix and Amazon.com are also jostling for share.

Zee’s four-year pact with Disney’s Star for TV broadcasting rights of certain cricket events will also be at risk if the deal collapses, as Zee would have to pay $1.32 billion to $1.44 billion over the tenure of the agreement, analysts have said.

The broadcaster missed an early-January deadline to pay $200 million, Bloomberg News reported on Jan. 9.

Zee shares closed 1.5 percent lower in a Saturday trading session in Mumbai. The market is closed on Monday for a public holiday in Maharashtra state.