Why Jim Cramer Likes Merck's Acquisition of Cubist Pharmaceuticals (CBST)

NEW YORK (TheStreet) -- Pharmaceutical giant Merck  (MRK) announced Monday it would acquire Cubist Pharmaceuticals  (CBST) for $8.4 billion plus the assumption of $1.1 billion of debt, or $102 a share.

TheStreet's Jim Cramer notes Cubist's major drug could come off patent in 2018. But he has had the company on his show Mad Money on CNBC a few times, and Cubist has claimed it has some blockbuster products in the pipe with regard to "superbugs."

Cramer points out that these "superbugs" land people in the hospital and the sicknesses are essentially fatal. He says that any company that has a formulation that can wipe out the diseases that occur in hospitals could have a larger market than people realize, and this is why he thinks Merck is buying Cubist.

Must Watch: Jim Cramer Explains Why He's in Favor of Merck's Acquisition of Cubist

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Cramer says he is in favor of this acquisition if Cubist really has something. If not, then this would be a huge write off, Cramer adds. But he says he does not believe that Merck and CEO Ken Frazier would "do something that irresponsible" without believing that Cubist has "superbug" cures in its pipe.

CBST Chart CBST data by YCharts

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

More from Markets

This Will Be the Ultimate Buy (or Sell) Signal for Stocks

This Will Be the Ultimate Buy (or Sell) Signal for Stocks

Shares of Square Slip After Venmo Debit Card Announcement

Shares of Square Slip After Venmo Debit Card Announcement

3 Fierce Chinese Tech Stocks to Gamble on Right Now

3 Fierce Chinese Tech Stocks to Gamble on Right Now

Stocks Slammed on Latest Trump Tariff Fears

Stocks Slammed on Latest Trump Tariff Fears

Boeing Slides as China Premier Li Says Willing to Continue Talks With Airbus

Boeing Slides as China Premier Li Says Willing to Continue Talks With Airbus