The high rate of failure in mergers and acquisitions is often blamed on cultural differences,organizational or national. More recently, it has been argued that cultural differences per se may be less of the problem than how the integration process is managed. The objective of the paper is to show how the process of socio-cultural integration can lead to positive outcomes such as a strong sense of a shared identity with the new organization, or negative outcomes such as intergroup polarization. Specifically, we argue that when socio-cultural processes threaten premerger identities, intergroup polarization becomes stronger which impedes the development of a shared identity. Threat to pre-merger identities may depend on the amount of changes envisioned and the extent to which organizational autonomy is decreased. However, this threat to pre-merger identities may be moderated by the perceived legitimacy of the differences in power and boundary permeability. This argument is illustrated by presenting a merger between two regional banks in Poland. Recommendations for future research are proposed and implications for managing integration processes in mergers and acquisitions are discussed.