Conversion of Securities

Thames Water PLC
28 December 2000


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

Thames Water Plc announces that all of the 26,876,964 remaining B Shares in
issue were converted into 1,762,058 ordinary shares of 23p each ('Ordinary
Shares') this morning.  The conversion rate was one Ordinary Share for every
15.25316 B Shares and entitlements to all fraction of shares arising are being
sold and the net proceeds remitted to the shareholders entitled thereto.  The
Ordinary Shares will be admitted to the Official List tomorrow.

The new Ordinary Share certificates will be despatched by 29 December 2000 and
cheques for fractional entitlements will be despatched by 10 January 2001. 
The proportionate preferential dividend on the B Shares is being paid to B
shareholders today.
 
Shareholders who receive Ordinary Shares as a result of the conversion may 
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. 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.