Olympus, a Japan-based global medical device company, has decided to terminate its acquisition of Taewoong Medical, a Korea-based specialist in gastrointestinal stents, just two months after announcing the deal in January.

The decision comes after Olympus discovered issues related to data integrity in Taewoong Medical's product lineup.

Olympus, a global leader in medical equipment, had initially agreed to buy Taewoong Medical for $255.5 million, with additional payments of up to $114.5 million contingent on the company's performance over the next two years.

The acquisition was aimed at enhancing Olympus's endoscopy portfolio, capitalizing on Taewoong's strengths in developing and manufacturing stents for the digestive tract, including the bile duct, esophagus, colon, and duodenum.

However, upon closer inspection, Olympus found inconsistencies in Taewoong's product data that were not in line with the information provided before the deal was closed.

These inconsistencies violated the terms of the purchase agreement, leading to the cancellation of the contract. Olympus stated that it had reached a mutual agreement with the original shareholders of Taewoong Medical to rescind the acquisition.

As part of this agreement, the original shareholders have refunded the acquisition payment, and Olympus will return its entire stake in Taewoong Medical.

Despite the setback, Olympus has downplayed the impact of the contract termination on its fiscal 2023 earnings, describing it as "immaterial" and that the company remains committed to its core business areas and exploring other strategic opportunities to strengthen its portfolio.

Adding to the narrative, a representative from Olympus's Korean branch remarked on the situation, indicating that the headquarters decided to cancel the acquisition and that they were not in a position to provide further details.

Taewoong Medical was unavailable to provide immediate comments regarding the matter.