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Cramer: BHI-Halliburton 'dead the moment it was mentioned'

When Baker Hughes and Halliburton called off their merger, CNBC's Jim Cramer wasn't surprised, saying the decision to pursue the deal was based on advice that was "so stupid it really is rather extraordinary."

The two oilfield services companies ditched their $28 billion merger after antitrust concerns surfaced from a regulatory lawsuit. Haliburton will pay a $3.5 billion breakup fee for the axed merger, according to Reuters.

The companies had expected the merger to result in "compelling benefits" as the U.S. oil industry battles with historically low prices amid oversupply, according to a statement.

"Today's outcome is disappointing because of our strong belief in the vast potential of the business combination to deliver benefits for shareholders, customers and both companies' employees," Martin Craighead, Baker Hughes' CEO, said in the statement.

But analysts, like Capital One's Luke Lemoine and Nomura's Matthew Johnston, said the market expected the deal to fall through, according to research notes. Halliburton's shares rose Monday while Baker Hughes' fell.

"This was the dumbest deal ever and they got really bad advice from the lawyers," Cramer said Monday on CNBC's "Squawk on the Street." "There was no chance whatsoever that this would happen."

Cramer said the two companies were out of sync with antitrust regulators when they agreed to the deal. Baker Hughes declined to comment, while Halliburton did not immediately respond to CNBC's request for comment.

"This is embarrassing," Cramer said. "I'd really like to out their lawyers as giving them horrible advice, because the people I talked to in the industry said this was dead the moment it was even mentioned."