Although most market players may believe that mergers and acquisitions are "great creators of value and synergy," this is not always the case, Jim Cramer told viewers of his "Mad Money" TV show Wednesday.

Analysts may try to talk acquisitions because that's how they get their bonuses, but there are only some acquisitions worth looking at, he said.

Brocade Communications

(BRCD)

fell from $6 to $5 on Tuesday after news of its merger with

McData

(MCDTA)

came out.

Cramer identified five types of bad acquisitions to help viewers recognize and then avoid the pain they can cause.

"All unhappy acquisitions are unhappy in their own way," he said.

First, Cramer named the "I'm gettin' out while the gettin' is good" acquisition, which happens when the seller is overvalued and wants to get out, he said.

The

Sprint Nextel

(S) - Get Report

merger is an example that fits into this category and a great reason to dump the stock, Cramer said.

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Second on his list is the "don't just stand there, do something" acquisition, in which a company that's in trouble and doesn't know how to get out buys another company, Cramer said.

These companies are "scared and desperate" for a new concept, but according to Cramer, this is "money down the drain."

eBay's

(EBAY) - Get Report

purchase of

Skype

is an example of this, he said.

eBay's management tried to keep the company rolling by buying Skype, but it ended up costing the company billions and didn't amount to any good for eBay, Cramer said.

"Lousy purchase" -- No. 3 -- or "panic and overpay," occurs when a company is worried about its slowing growth or competition and pays too much for an acquisition, he said.

This differs from bad acquisition No. 2, in that this one makes sense, but just costs too much.

Cramer said that

EMC

(EMC)

did this when it grossly overpaid for

RSA Security

(RSAS)

and tried to play catch-up with other companies in its sector.

Disaster acquisition No. 4 Cramer dubbed "the two drunken sailors trying to keep each other up" deal. This is when two underperforming companies, which are missing their quarters try to stay afloat by merging, he said.

The

Alcatel

(ALA)

and

Lucent

(LU)

union fits this category well, he said.

Cramer believes that Alcatel should have either renegotiated or walked out from the deal, but it's too late, Cramer said. People should sell both of these drunken sailors.

The fifth, final and "absolute worst" type of bad acquisition, he said, alluding to Napoleon, is when a little company takes on a bigger company in a bidding war for a third company.

Cramer cited

Boston Scientific

(BSX) - Get Report

vs.

Johnson & Johnson

(JNJ) - Get Report

as an example.

As a result, Boston Scientific overpaid for

Guidant

and has never been able to recover from it, he said, adding that he believes it was a sell all the way at $25. Boston Scientific was recently at $15.66.

"Boston Scientific was like a rebel without a cause, but not as cool as James Dean," he said. "They lost here."

Takeovers can go either terribly wrong, or they can make you money, Cramer said.

Four stocks that he believes should go higher and make you money because of their

smart

acquisitions are

Federated Department Stores

(FD)

,

Whirlpool

(WHR) - Get Report

,

Procter & Gamble

(PG) - Get Report

and Johnson & Johnson.

All four of these stocks are a buy, he said.

By Procter & Gamble buying

Gillette

and Whirlpool buying

Maytag

, both companies eliminated competition.

Although this may be bad for the consumer, it isn't so for the shareholder, Cramer said.

Federated Stores similarly removed competition and raised its prices.

Acquisitions such as Johnson & Johnson buying

Pfizer's

(PFE) - Get Report

over-the-counter business creates more opportunities for the companies to do what they are good at, he said, calling it a "survival of the fittest" merger.

Bad acquisitions are unique in their own way, but these four all bought competition and strengthened themselves, Cramer said.

Am I Diversified?

In the "Am I Diversified" segment of the show, the first caller owned the following five stocks:

Yahoo!

(YHOO)

,

Disney

(DIS) - Get Report

,

Coca-Cola

(KO) - Get Report

,

Ingersoll Rand

(IR) - Get Report

and

CapitalSource

(CSE)

.

Cramer said while the portfolio was diversified, he was worried about CapitalSource, as it is a company that makes loans.

This is dangerous, he said, and advised the caller to swap out of it and go into

Bank of America

(BAC) - Get Report

or

Wells Fargo

(WFC) - Get Report

instead.

Cramer's second caller owned the following five stocks: Bank of America,

Las Vegas Sands

(LVS) - Get Report

,

ConocoPhillips

(COP) - Get Report

,

Pfizer

(PFE) - Get Report

and

Crystallex

(KRY)

Cramer said the caller knows how to play the game and called the portfolio diversified.

Cramer welcomed

SunPower

(SPWR) - Get Report

CEO Tom Werner to the show and asked him about the company's visibility, given that SunPower is the only game in town.

Solar has a great macroenvironment, so people are very biased toward it, Werner said. The fundamental question here is whether we can get it to the right cost or not, but as we scale business, we pull costs out, the visibility is excellent and the outside opportunity is phenomenal, he said.

When Cramer asked if Germany is ahead of the U.S. in solar energy, Werner said "people in Germany fundamentally believe that they need to become energy-independent, so policy followed" in the country.

There is a tariff where people get paid to produce solar power there, he said,

In the U.S., New Jersey and California lead the way and represent 90% of the market, Werner went on to say. Although there is a federal program that expires in a year, and SunPower is working to extend it for eight more years, he said the solar lobby is no where as big as it is for coal or other energies.

To view Cramer's interview with Tom Werner, please click here.

Lightning Round

Cramer was bullish on

Bank of America

(BAC) - Get Report

,

Schlumberger

(SLB) - Get Report

,

Sears Holdings

(SHLD)

,

Exxon Mobil

(XOM) - Get Report

,

IAC/InterActiveCorp

(IACI)

,

Rentech

(RTK)

,

Gymboree

(GYMB)

,

The Children's Place

(PLCE) - Get Report

,

Johnson Controls

(JCI) - Get Report

,

Zimmer Holdings

(ZMH)

,

Mirant

(MIR)

and

Black & Decker

(BDK)

.

Cramer was bearish on

Mylan Laboratories

(MYL) - Get Report

,

LoopNet

(LOOP) - Get Report

,

Countrywide Financial

(CFC)

,

Lennox International

(LII) - Get Report

,

Atmel

(ATML)

,

Medtronic

(MDT) - Get Report

,

Citi Trends

(CTRN) - Get Report

,

New Century Financial

(NEW) - Get Report

and

Solexa

(SLXA)

.

In the "Sudden Death" round Cramer was bullish on

MetLife

(MET) - Get Report

.

He was bearish on

Sara Lee

(SLE)

,

Prudential

(PRU) - Get Report

and

TurboChef Technologies

(OVEN)

.

For more of Cramer's insights during the most recent Lightning Round, click here.

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by

clicking here

.

At the time of publication, Cramer was long Sears Holdings, Ingersoll Rand and Yahoo!

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on Mad Money are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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