diff --git a/mercurial/merge.py b/mercurial/merge.py
--- a/mercurial/merge.py
+++ b/mercurial/merge.py
@@ -523,7 +523,6 @@
     narrowed.
     """
     # TODO: handle with nonconflicttypes
-    nooptypes = {mergestatemod.ACTION_KEEP}
     nonconflicttypes = {
         mergestatemod.ACTION_ADD,
         mergestatemod.ACTION_ADD_MODIFIED,
@@ -541,7 +540,7 @@
             pass
         elif not branchmerge:
             mresult.removefile(f)  # just updating, ignore changes outside clone
-        elif action[0] in nooptypes:
+        elif action[0] in mergeresult.NO_OP_ACTIONS:
             mresult.removefile(f)  # merge does not affect file
         elif action[0] in nonconflicttypes:
             raise error.Abort(
@@ -564,6 +563,11 @@
     It has information about what actions need to be performed on dirstate
     mapping of divergent renames and other such cases. '''
 
+    NO_OP_ACTIONS = (
+        mergestatemod.ACTION_KEEP,
+        mergestatemod.ACTION_KEEP_ABSENT,
+    )
+
     def __init__(self):
         """
         filemapping: dict of filename as keys and action related info as values
@@ -711,12 +715,12 @@
                 a
                 not in (
                     mergestatemod.ACTION_GET,
-                    mergestatemod.ACTION_KEEP,
                     mergestatemod.ACTION_EXEC,
                     mergestatemod.ACTION_REMOVE,
                     mergestatemod.ACTION_PATH_CONFLICT_RESOLVE,
                 )
                 and self._actionmapping[a]
+                and a not in self.NO_OP_ACTIONS
             ):
                 return True
 
@@ -1167,6 +1171,11 @@
                 repo.ui.note(_(b" %s: picking 'keep' action\n") % f)
                 mresult.addfile(f, *bids[mergestatemod.ACTION_KEEP][0])
                 continue
+            # If keep absent is an option, just do that
+            if mergestatemod.ACTION_KEEP_ABSENT in bids:
+                repo.ui.note(_(b" %s: picking 'keep absent' action\n") % f)
+                mresult.addfile(f, *bids[mergestatemod.ACTION_KEEP_ABSENT][0])
+                continue
             # If there are gets and they all agree [how could they not?], do it.
             if mergestatemod.ACTION_GET in bids:
                 ga0 = bids[mergestatemod.ACTION_GET][0]
@@ -1412,7 +1421,7 @@
             wctx[f].audit()
             wctx[f].remove()
 
-    numupdates = mresult.len() - mresult.len((mergestatemod.ACTION_KEEP,))
+    numupdates = mresult.len() - mresult.len(mergeresult.NO_OP_ACTIONS)
     progress = repo.ui.makeprogress(
         _(b'updating'), unit=_(b'files'), total=numupdates
     )
@@ -1521,6 +1530,11 @@
     ):
         repo.ui.debug(b" %s: %s -> k\n" % (f, msg))
         # no progress
+    for f, args, msg in mresult.getactions(
+        (mergestatemod.ACTION_KEEP_ABSENT,), sort=True
+    ):
+        repo.ui.debug(b" %s: %s -> ka\n" % (f, msg))
+        # no progress
 
     # directory rename, move local
     for f, args, msg in mresult.getactions(
diff --git a/mercurial/mergestate.py b/mercurial/mergestate.py
--- a/mercurial/mergestate.py
+++ b/mercurial/mergestate.py
@@ -120,6 +120,10 @@
 ACTION_LOCAL_DIR_RENAME_GET = b'dg'
 ACTION_DIR_RENAME_MOVE_LOCAL = b'dm'
 ACTION_KEEP = b'k'
+# the file was absent on local side before merge and we should
+# keep it absent (absent means file not present, it can be a result
+# of file deletion, rename etc.)
+ACTION_KEEP_ABSENT = b'ka'
 ACTION_EXEC = b'e'
 ACTION_CREATED_MERGE = b'cm'
 
@@ -837,6 +841,10 @@
     for f, args, msg in actions.get(ACTION_KEEP, []):
         pass
 
+    # keep deleted
+    for f, args, msg in actions.get(ACTION_KEEP_ABSENT, []):
+        pass
+
     # get
     for f, args, msg in actions.get(ACTION_GET, []):
         if branchmerge:
diff --git a/mercurial/sparse.py b/mercurial/sparse.py
--- a/mercurial/sparse.py
+++ b/mercurial/sparse.py
@@ -399,7 +399,7 @@
             temporaryfiles.append(file)
             prunedactions[file] = action
         elif branchmerge:
-            if type != mergestatemod.ACTION_KEEP:
+            if type not in mergemod.mergeresult.NO_OP_ACTIONS:
                 temporaryfiles.append(file)
                 prunedactions[file] = action
         elif type == mergestatemod.ACTION_FORGET: