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Balance sheet for a large corporate works very different than a PE firm especially when it comes to considerations like maintaining a credit rating given how debt for a controling interest works on the balance sheet.
That's not to say it's always all purely funded from the existing cash on the balance sheet, it's just leverage levels are not as high compared to a PE shop.
Plenty of strategics do lever up to make big acquisitions, but it's not an "LBO" even if they take on a ton of debt bc LBO implies there's an exit. Also keep in mind that PE firms lever up in the first place to juice returns, but strategics should generally create value in acquisitions from synergies (otherwise you probably shouldn't be doing the deal).
That's a very interesting question. In my opinion, there are a couple of reasons.
1. Economics: strategics evaluate acquisition success differently, as they target a modest financial return - simply a figure that exceeds their own cost of capital. No need for 20% + IRR. Why place additional leverage then, increase the risk of financial distress for the overall entity and risk your current credit rating?
2. Strategy: corporate acquirers pursue M&A not only for financial reasons. Strategic buyers often view M&A as a fast and effective way of enhancing their present operations by integrating assets and capabilities that they consider to be valuable - such as strong brands, access to new markets and products, or additional sources of growth. In other words, they are seeking to buy a strong strategic fit. It is not necessarily only a financial consideration.
3. Synergies: theoretically, corporate buyers should be extracting synergies and integrating acquisition targets with their core business. Therefore, the target company won't remain in the status quo - it will be restructured / integrated / dismantled. There is lots of execution risk. If you lever this particular project, there might be consequences for the whole corporation if the integration does not go to plan (think of GE that overlevered particular bits of the business, introduced undue complexity and now is cleaning up its operations). This is very different from a vanilla LBO that sits in its own SPV and - typically - does not take the entire PE fund down in case of trouble in this particular business.
4. Listed businesses: public corporate acquirers do not enjoy operating confidentiality - they have to report to the shareholders, the press, analysts on a quarterly basis. Surely, this level of scrutiny encourages them to tread carefully, especially with any decisions that appear aggressive to the outsiders. Putting an LBO-style debt on an M&A target will raise lots of eyebrows, in my view.
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