Klarna Bank has announced that it will acquire Close Brothers Retail Finance (CBRF) to strengthen its retail financing business in the UK market.

The financial terms of the transaction were not disclosed.

Established in 2014, Close Brothers Retail Finance offers omnichannel retail financing services. Currently, it is said to have around 600 active merchants in the UK.

It provides point of sale financing to the shoppers enabling the merchants to expand their customer base and increase sales.

Later, the shoppers can repay the loaned amount in fixed monthly instalments.

CBRF managing director Alex Marsh said: “We at CBRF have transformed retail finance in the UK over the past four years and are extremely proud of what we have accomplished.

“Together with Klarna, we have the exciting opportunity to further develop our capabilities and deliver even more services and value to merchants to help them succeed.

“We are now focussing on a smooth integration and seamless continuity of our offering to merchants and customers.”

Besides bolstering its presence in the UK retail financing market, the acquisition is expected to enable Klarna to grow its consumer offerings.

Klarna chief commercial officer Michael Rouse said: “We are delighted to welcome CBRF to Klarna, the complementary talents and propositions will help accelerate Klarna’s leadership in the payments market.

“What CBRF have achieved to date in the UK is impressive but together we can invest in realising the full potential of the business.”

The completion of the acquisition is subject to Financial Supervisory Authority of Sweden (Finansinspektionen) approval.