Conversion of Securities

Thames Water PLC
8 December 2000


CONVERSION OF B SHARES OF 79P EACH ('B SHARES') INTO ORDINARY SHARES

Thames Water Plc announces that it is giving notice to the holders of B Shares
that, in accordance with the rights of the B Shares and the restrictions to
which they are subject, it is exercising its option to convert the outstanding
26,876,964 in issue into ordinary shares of 23p each ('Ordinary Shares').

The conversion of the B Shares will take place on 28 December 2000,  on which
date a proportionate preferential dividend in respect of the converted B
Shares will be despatched to B Shareholders on the register at the opening of
business on 28 December 2000.

It is expected that the new Ordinary Shares created on conversion will
commence trading on 29 December 2000 and share certificates will be despatched
on 28 December 2000.

Shareholders who receive Ordinary Shares as a result of the conversion may
then accept the offer made by Merrill Lynch International on behalf of a
wholly-owned subsidiary of RWE AG (the 'Offeror') for all the issued and to be
issued Ordinary Shares of the Company. Once conversion of the B Shares becomes
effective, the Offeror intends to apply the provisions of Sections 428 to 430F
of the Companies Act 1985 to acquire compulsorily any outstanding Ordinary
Shares and to procure that the Company applies for cancellation of both the
official listing and the admission to trading of the Company's shares.