Sevilla informed Independiente del Valle of the decision through a short statement published on their official channels on Monday, citing conditions written into the original agreement rather than offering further detail.
"Sevilla FC announces that it is not possible to complete the signing of player Patrik Mercado for reasons contemplated in the agreements signed with Independiente del Valle, which has been formally and thoroughly informed of this circumstance," the club said.
According to As, the decision comes down to the severe injury the 23-year-old suffered weeks after the pre-agreement was announced in February.
Mercado ruptured his anterior cruciate ligament in his right knee in late March, an injury that cost him a place at this year's World Cup, where he had already secured a spot in Ecuador's squad. It also prompted Sevilla to reconsider a deal reportedly worth around €6 million.
As recently as mid-July, sporting director José Ignacio Navarro left the transfer's future deliberately vague, noting that no deadline had ever been fixed and that the conditions attached to a possible signing had still not been met.
Independiente del Valle's exit door had briefly looked set to lead to Europe for one of their most productive academy graduates, before the injury derailed his season entirely. Reports in Ecuador have suggested a penalty of around €3 million could be owed to Sevilla for walking away from the agreement, though other outlets have put the figure closer to $3.5 million.
Sevilla have denied that any penalty applies at all.
For Independiente del Valle, the collapse of the transfer represents a significant financial setback, with the sale having been expected to fund further squad investment following a campaign in which Mercado was one of the club's standout performers.
He was named Ecuador's best player and best attacking midfielder in the country's EL PRO awards for the 2025 season, having contributed seven goals and eleven assists, form that had also drawn reported interest from Chelsea and Brighton before Sevilla moved to secure his signature in February.