Current text based Software Configuration Management (SCM) systems have trouble with refactorings. Refactorings result in global changes and lead to merge conflicts. A refactoring-aware SCM system reduces merge conflicts, preserves program history better and makes it easier to understand program evolution. This paper describes MolhadoRef, a refactoring-aware SCM system and the merge algorithm at its core. MolhadoRef records change operations (refactorings and edits) used to produce one version, and replays them when merging versions. Since refactorings are change operations with well defined semantics, MolhadoRef treats them intelligently. A case-study shows that MolhadoRef solves automatically more merge conflicts than CVS while resulting in fewer merge errors.