Recently, the impact of firm location on corporate finance has received great international concern; however, the research in this field has just started in China. Because the choice of payment means can directly influence large shareholder control right and capital structure of acquirer firms, this paper studies how acquirer firm’s location influence the choice of payment means in M&A. We find that the rural acquirer firms with longer distance away from the urban prefer to use equity payment, but the preference is moderated by acquirer firm’s large shareholder control, financial constraints, property rights and information asymmetry.