The authors of this paper survey horizontal M&A cases from iron and steel industry in southwestern China to explore relationships between initial factors, preparative and implementation process, performance of knowledge transfer through path analysis method. The results show that initial factors about knowledge of the acquiring corporation and the counterpart have not any significant impact on levels, implementation and performance of knowledge transfer during horizontal M&A, but they have positive impact on motivation of M&A and have mutual complementary relationships. The initial factors about knowledge of the acquiring corporation have not any significant impact on devotion . the motivation of M&A has positive impact on levels and devotion of knowledge transfer .The levels of knowledge transfer only has positive impact on implementation process and the same with devotion of knowledge transfer on implementation process and performance,the implementation of knowledge transfer has positive impact on performance .Finally the authors put forward some suggestions.