diff --git a/mercurial/merge.py b/mercurial/merge.py
--- a/mercurial/merge.py
+++ b/mercurial/merge.py
@@ -1380,7 +1380,6 @@
         # Pick the best bid for each file
         repo.ui.note(_('\nauction for merging merge bids\n'))
         actions = {}
-        dms = [] # filenames that have dm actions
         for f, bids in sorted(fbids.items()):
             # bids is a mapping from action method to list af actions
             # Consensus?
@@ -1389,8 +1388,6 @@
                 if all(a == l[0] for a in l[1:]): # len(bids) is > 1
                     repo.ui.note(_(" %s: consensus for %s\n") % (f, m))
                     actions[f] = l[0]
-                    if m == ACTION_DIR_RENAME_MOVE_LOCAL:
-                        dms.append(f)
                     continue
             # If keep is an option, just do it.
             if ACTION_KEEP in bids:
@@ -1415,18 +1412,7 @@
             repo.ui.warn(_(' %s: ambiguous merge - picked %s action\n') %
                          (f, m))
             actions[f] = l[0]
-            if m == ACTION_DIR_RENAME_MOVE_LOCAL:
-                dms.append(f)
             continue
-        # Work around 'dm' that can cause multiple actions for the same file
-        for f in dms:
-            dm, (f0, flags), msg = actions[f]
-            assert dm == ACTION_DIR_RENAME_MOVE_LOCAL, dm
-            if f0 in actions and actions[f0][0] == ACTION_REMOVE:
-                # We have one bid for removing a file and another for moving it.
-                # These two could be merged as first move and then delete ...
-                # but instead drop moving and just delete.
-                del actions[f]
         repo.ui.note(_('end of auction\n\n'))
 
     if wctx.rev() is None: