Mergers and acquisitions (M&A) are major events in the life of a firm. Role of bidder to acquire certain firm and payment mode are essential in the literature of M&A. Mode of payment depends on certain characteristics of firms such as bidder firm’s ownership, financial, and corporate governance. In the present study we found that bidder firm ownership variables have a significant impact on the mode of payment in nonfinancial sector of Pakistan. The managerial ownership have a negative and linear relation with cash payments in M&A, which reveals that managers are more concerned about firm’s risk reduction rather than increasing their control through cash payments. The results also imply the validation of outside monitoring hypothesis i.e. the institutional investors are concerned with increased leverage (part of cash payment) in firm and thus increasing the monitoring of firms by outside creditors. However, outside block-holders are not actively playing their role in monitoring of firms and don’t have long term presence in the firm. The bidder firm financial variables are proved to be significant determinants of payment mode in M&A deals. The positive relation of non-listed target with cash payment implies that shareholders of unlisted targets are more probably to accept cash payments given the concentrated and illiquid portfolio holdings by target firms.