ZURICH, Reuters – Roche’s purchase of nearly a quarter of Novartis’ voting stock for $20.7 million will increase its strategic flexibility, said Chairman Christoph Franz in an interview on Saturday.

On Thursday Roche was freed from ties with a competitor that had strategic vetoing powers, but it maintained a passive role against the powerful Roche family shareholders.

Franz explained to Schweizer newspaper Finanz und Wirtschaft that Roche could afford the deal, without cutting down on its research and development expenditures and acquisitions.

He said that Novartis will use bridge financing to first pay Novartis. Then Roche will refinance Novartis’ debt using longer-term instruments like bonds.

“Our net debt is almost zero. Franz explained that raising substantial debt is crucial without having to compromise operational and strategic flexibility regarding our core businesses.

We can focus our research and development efforts, and we can keep in-licensing acquisitions and in-licensing as in previous years. This transaction does not mean that we lose any freedom. It’s quite the contrary.

Franz explained that the change in situation, which saw the repurchased shares being canceled, was helping Roche move forward without Novartis’ approval.

He said, “One of the reasons we are so proud is the fact that any decision requiring a majority vote at the Annual General Meeting must be approved by a major shareholder like Novartis.”

“Though there wasn’t any cause for concern, the new situation is clearer.”

Franz said that Roche wouldn’t go on an acquisition spree to acquire large companies.

Franz explained that he believes smaller acquisitions of bolt-on companies are the best way to boost innovation in the company.

“Also the deal with Novartis would give us greater freedom in issuing equity over the medium- and long-term.” However, our current policy is to be very careful with large acquisitions.