Most of the coverage of Dell’s decision to buy Perot Systems for $3.9 billion says the move makes strategic sense, because the big players in the computer industry have large services businesses, and Dell will now have a much stronger services offering. Some writers also note that Dell paid a steep price: nearly 30 times estimates for Perot Systems earnings this year, and a 68% premium over where Perot stock traded before the takeover announcement. But no one seems to have tried to assess whether the price is so high that the deal shouldn’t have been done. The answer is that the price is likely way too high–the deal will make Dell shareholders poorer. How is that strategic?

Media coverage says Dell should be able to wring cost savings out of Perot. But why? Dell has no experience running a services business like Perot–while Dell does several billion dollars of service business each year, the business revolves around help desks and other relatively low-level tasks, not the data-center management and other, more complicated services that Perot offers. So, what expertise will Dell provide to the Perot business? Dell isn’t even changing the management team that will run Perot.

While the assumption is that adding size will lead to economies of scale, studies have shown that isn’t necessarily so. If you double in size by doing twice as much of exactly the same thing, then, sure, you’ll generate efficiencies. But if you double in size by taking on a different task, you can actually become less efficient. A major outsourcing contract is different enough from cranking out PCs on an assembly line that Dell and Perot have little overlap where costs could be taken out, and problems with coordination could well arise. Among other issues, consulting firms like Perot Systems typically have a more free-wheeling culture than a lean manufacturing business like Dell.

It may be that Dell is aligning itself more closely with trends in the computer industry by adding a services business. But, by overpaying so heavily, the company is increasing its odds of longevity at the expense of return to shareholders. The stock is already off 60% over the past five years. Going on an uneconomic acquisition binge will only add to the problems.