* Unilever buys Sara Lee personal care business
* Strengthens leadership in cleansing and deodorants
* Sara Lee sees good interest in household business
* Sara Lee launches $1 billion share buyback
(Recasts with Sara Lee comments, analyst, updates shares)
By David Jones
LONDON, Sept 25 (Reuters) - Consumer goods giant Unilever agreed to pay 1.275 billion euros ($1.87 billion) for Sara Lee's personal care brands like Sanex and Radox on Friday to reinforce its global lead in deodorants and skin cleansing.
The Anglo-Dutch Unilever Plc/NV is buying a business with 85 percent of its sales in Europe, while Sara Lee will now look to sell its household goods business separately as it launched a $1 billion share buyback programme.
The deal marks the first major acquisition for Unilever's new Chief Executive Paul Polman, while Sara Lee's CEO Brenda Barnes is now half-way through a planned sell-off of non-core business aimed at focusing the U.S. group on food and drink.
"The Sara Lee brands enjoy strong consumer recognition, offer significant growth potential and are an excellent fit with Unilever's existing business," said Polman in a statement.
Unilever says Sanex, Radox and also Duschdas brands will complement its Dove, Axe and Rexona at slightly lower prices and strengthen its European business in key markets such as Britain, the Netherlands, Germany, France, Spain, Italy and Denmark.
Sara Lee said the brands sold accounted for 55 percent of the profits from its businesses up for sale, and added it had seen significant interest in its household brands including Ambi Pur air fresheners, Kiwi shoe polish, Vapona insecticides and its non-European cleaning brands.
"We intend to use proceeds from the divestiture to invest for growth in our core business and to repurchase stock," Barnes said in a Sara Lee statement.
The U.S. group also reiterated it intended to maintain its current quarterly dividend of 11 cents for the next four quarters regardless of the timing of disposals.
Unilever Plc shares were flat at 17.36 pounds by 1023 GMT in a slightly firmer UK stock market.
Credit Suisse analyst Charlie Mills said the price Unilever is paying of 10 times core operating profit, or EBITDA, is not huge by industry standards which reflects the fairly disparate collection of assets which also include Brylcream hair gel.
"We're not convinced that this is the greatest collection of assets but another acquisition shows Unilever still moving from the back foot (cost cutting and disposals) to the front foot (volume growth and acquisitions)," he said.
Sara Lee put its household and personal care business up for sale earlier this year, and it was expected by analysts to break up the wide-ranging business to make a sell-off easier.
The Sara Lee brands being acquired by Unilever generated annual sales in excess of 750 million euros with EBITDA of 128 million euros for the year ending June 2009. The overall Sara Lee business up for sale had annual sales of 1.5 billion euros.
The deal is subject to regulatory approval and consultation with European employee works councils. ($1=.6810 Euro) (Reporting by David Jones; Editing by Jon Loades-Carter)