Sony Group Corp. has officially notified Zee Entertainment Enterprises Ltd. it plans to call off the merger between its India unit and the media network, ending a two-year acquisition saga and leaving Zee vulnerable to competition as rivals bulk up.

The Japanese entertainment giant sent a termination letter to Zee early on January 22 and is expected to disclose it to the exchange later, said people familiar with the plan, who asked not to be identified as the announcement is not yet public.

Sony cited conditions of the merger agreement not being met as the reason for the termination, according to the letter seen by Bloomberg. 

The termination follows a stalemate between the companies over whether Zee’s Chief Executive Officer Punit Goenka would lead the merged entity amid an investigation into his conduct by India’s capital markets regulator. The standoff now appears to have scuttled the deal, which would have created a $10 billion media giant with the financial muscle to take on global powerhouses Netflix Inc. and Inc.

The termination letter from Sony came after a 30-day grace period ended over the weekend when the two sides couldn’t reach an agreement on a deadline set in late December.

A Sony spokeswoman declined to comment. A representative for Zee did not immediately respond to a request for comment. 

Bloomberg News reported on January 8 that Sony was planning to call off the merger as the two sides fail to resolve the leadership dispute. Zee said later that they were still in talks to complete the merger.

The last-lap tussle over leadership was the single biggest hurdle for the deal — Zee was insisting that Goenka would lead the new entity as agreed in the 2021 pact, while Sony was wary of his appointment given the regulatory probe against him.