diff --git a/src/main/java/io/openliberty/tools/common/plugins/util/ServerFeatureUtil.java b/src/main/java/io/openliberty/tools/common/plugins/util/ServerFeatureUtil.java
index fc0d23ad..6bf78e40 100644
--- a/src/main/java/io/openliberty/tools/common/plugins/util/ServerFeatureUtil.java
+++ b/src/main/java/io/openliberty/tools/common/plugins/util/ServerFeatureUtil.java
@@ -612,7 +612,7 @@ private FeaturesPlatforms handleOnConflict(FeaturesPlatforms origResult, String
         } else {
             // anything else counts as "merge", even if the onConflict value is invalid
             if ((fp != null) && (!fp.getFeatures().isEmpty() || !fp.getPlatforms().isEmpty())) {
-                if (result.getFeatures().isEmpty() && result.getPlatforms().isEmpty()) {
+                if ((result == null) || (result.getFeatures().isEmpty() && result.getPlatforms().isEmpty())) {
                     result = fp;
                 } else {
                     result.getFeatures().addAll(fp.getFeatures());
diff --git a/src/test/java/io/openliberty/tools/common/plugins/util/InstallFeatureUtilGetServerFeaturesTest.java b/src/test/java/io/openliberty/tools/common/plugins/util/InstallFeatureUtilGetServerFeaturesTest.java
index 41dd610e..b8ffd60d 100644
--- a/src/test/java/io/openliberty/tools/common/plugins/util/InstallFeatureUtilGetServerFeaturesTest.java
+++ b/src/test/java/io/openliberty/tools/common/plugins/util/InstallFeatureUtilGetServerFeaturesTest.java
@@ -156,6 +156,24 @@ public void testMergeServerXML() throws Exception{
         verifyServerFeatures(expected);
     }
     
+    /**
+     * Tests server.xml with MERGE function with nested include files, one of which contains no featureManager
+     * 
+     * @throws Exception
+     */
+    @Test
+    public void testNestedMergeServerXML() throws Exception{
+        copyAsName("server_merge_nested.xml", "server.xml");
+        copy("extraFeatures.xml");
+        copy("noList_nested_features.xml");
+
+        Set<String> expected = new HashSet<String>();
+        expected.add("orig");
+        expected.add("extra");
+
+        verifyServerFeatures(expected);
+    }
+
     /**
      * Tests server.xml with REPLACE function
      * 
diff --git a/src/test/resources/servers/noList_nested_features.xml b/src/test/resources/servers/noList_nested_features.xml
new file mode 100644
index 00000000..a11901c5
--- /dev/null
+++ b/src/test/resources/servers/noList_nested_features.xml
@@ -0,0 +1,4 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<server description="new server">
+    <include location="extraFeatures.xml" onConflict="MERGE"/>
+</server>
\ No newline at end of file
diff --git a/src/test/resources/servers/server_merge_nested.xml b/src/test/resources/servers/server_merge_nested.xml
new file mode 100644
index 00000000..2a29f2b6
--- /dev/null
+++ b/src/test/resources/servers/server_merge_nested.xml
@@ -0,0 +1,7 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<server description="new server">
+    <featureManager>
+        <feature>orig</feature>
+    </featureManager>
+    <include location="noList_nested_features.xml" onConflict="MERGE"/>
+</server>
\ No newline at end of file