diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index 8ac6b0f6471..8558871e6bf 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -4523,7 +4523,7 @@ namespace ts {
                 t;
         }
 
-        function createUnionOrIntersectionProperty(containingType: UnionOrIntersectionType, name: string) {
+        function createUnionOrIntersectionProperty(containingType: UnionOrIntersectionType, name: string): Symbol {
             const types = containingType.types;
             let props: Symbol[];
             // Flags we want to propagate to the result if they exist in all source symbols
@@ -5914,11 +5914,12 @@ namespace ts {
                 }
                 if (leftProp.name in members) {
                     const rightProp = members[leftProp.name];
-                    if (rightProp.flags & SymbolFlags.Optional) {
+                    const rightType = getTypeOfSymbol(rightProp);
+                    if (maybeTypeOfKind(rightType, TypeFlags.Undefined) || rightProp.flags & SymbolFlags.Optional) {
                         const declarations: Declaration[] = concatenate(leftProp.declarations, rightProp.declarations);
                         const flags = SymbolFlags.Property | SymbolFlags.Transient | (leftProp.flags & SymbolFlags.Optional);
                         const result = <TransientSymbol>createSymbol(flags, leftProp.name);
-                        result.type = getUnionType([getTypeOfSymbol(leftProp), getTypeOfSymbol(rightProp)]);
+                        result.type = getUnionType([getTypeOfSymbol(leftProp), getTypeWithFacts(rightType, TypeFacts.NEUndefined)]);
                         result.leftSpread = leftProp;
                         result.rightSpread = rightProp;
                         result.declarations = declarations;