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In short he will be trying to do what one of EMI's

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In short, he will be trying to do what one of EMI's competitors among the "Big Five" music majors has already managed. Universal Music, the largest of the majors and home to artists such as U2, Shaggy and Limp Bizkit, has been outperforming the industry to such an extent that it has set itself an extraordinary target. It expects to make more profit than Warner Music, Sony Music, EMI and BMG put together within two to three years."We think we have a good chance of getting there," says Jorgen Larsen, the chief executive of Universal Music International, a division that includes all world markets apart from the United States "We know what we have coming up this year. It should be our strongest ever with two albums from Eminem and others from Limp Bizkit, U2, Shania Twain and some new signings from our competitors."Universal, part of the Vivendi Universal conglomerate that also includes Universal Pictures, Canal Plus and a large utilities business, has already proved a resilient performer in a difficult market. Earlier this month it reported flat profits before interest, tax and depreciation of 1.2bn euros (£740m).

This is in a global music market estimated to have declined by around 5 per cent. It also compares with the paltry figure of just £150m, which EMI is expected to achieve for the past year (or an estimated loss of £3m after exceptional items, according to some analysts).Vivendi's results announcement this month stated that Universal accounted for one in four albums sold worldwide last year. And despite a falling music market, the business achieved unit sales just 1 per cent lower than the previous 12 months.How is Universal managing to buck the trends? There are a combination of factors such as leading market share and strong positions in growing musical genres such as hip-hop and metal. There is also the avoidance, so far, of artist contract cock-ups such as the Mariah Carey deal at EMI, which cost the company £19.6m to sever.One senior music executive says: "It's down to management They really concentrate on their successes Once something happens they really go for it in a big way. The way they've helped U2 is an example."But for City analysts the most important factor is merger synergies. They say Universal's success in completing a major deal before the regulatory authorities clamped down on further industry consolidation has given the group a huge advantage.

The mega-merger of Universal and PolyGram in 1998 brought together two companies that had already snapped up several other labels. Universal had acquired MCA, while PolyGram had picked up Island, A&M, Motown and Def Jam. All this preceded Vivendi's takeover of Seagram, which owned the Universal business as well as the drinks division which was later sold.While Jean-Marie Messier's reinvention of Vivendi as a media giant has been widely criticised, the music business has certainly been a success.The Universal-PolyGram deal therefore created a global giant with scope for significant cost-savings. Since then, they've shut the door."Simon Baker, at SG Securities, agrees. "Whether they were lucky or had great foresight I don't know but getting that deal through has meant they are still enjoying significant synergies."Since that deal EMI has tried to catch up by holding merger talks with Warner Music and BMG, the music division of the German media group Bertelsmann, but failed to agree a structure capable of satisfying the competition authorities.At Universal, Mr Larsen declines to comment on the costs-saving boost.

"You don't expect me to answer that, do you?" But he points to Universal's apparent efficiencies compared with rivals. "As a result of that merger, we went through an intense period of restructuring and we got through that before the market declined EMI and Warner have about 12,000 staff each Universal has less than 12,000 [despite being much bigger]. That makes a big difference."Mr Larsen says Alain Levy will shake-up EMI but make it a better business. "I've know Alain for 30 years and he'll operate with common sense I think he'll combine the back office of Virgin and EMI. But I'm surprised that took so long." Commenting further on EMI he says: "It is a strong company with a good catalogue but it has suffered for two reasons: an inability to break into the United States and internal paralysis as a result of these failed mergers."The second factor driving Universal's growth is its market share.

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