Proposed Acquisition of E'town Corp. - Part 2

Thames Water PLC
22 November 1999


                       THAMES WATER PLC ('THAMES WATER')
                       ---------------------------------
                                       
             PROPOSED ACQUISITION OF E'TOWN CORPORATION ('E'TOWN')
             -----------------------------------------------------
                                       
                 PROVIDES FOR FURTHER NORTH AMERICAN EXPANSION
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Part 2 

Thames Water is pleased to announce that it has entered into an agreement with
E'town Corporation under which Thames Water has agreed, subject to certain
conditions, to acquire E'town (the 'Acquisition') for a cash consideration of
GBP367.9 million (USD607.1 million) being a price of USD68 per share.  In
addition, Thames Water will be assuming the net debt of E'town which at the
end of September 1999 stood at GBP206.7 million (USD341.0 million).  The
Acquisition represents an important step in the continuing development of
Thames Water's international activities and enhances its ability to accelerate
the growth of its operations in North America.

Thames Water's strategy is to develop its position as the leading company
solely focused on providing water and waste water operations and services
around the world.  Expanding its presence in North America (the largest market
in the world) complements Thames Water's established businesses in Europe and
Asia.  Thames Water currently serves a customer base of over 9.8 million
outside the UK, and International Operations generated an operating profit of
GBP20.5 million on turnover of GBP63.6 million in the six months to 30th
September, 1999.  The Acquisition represents Thames Water's most significant
investment in the United States market and will make a major contribution to
its international profile and spread of activities.  The United States is
expected to provide opportunities for profitable growth in the water and waste
water market, particularly as municipal authorities are increasingly willing
to outsource the treatment and distribution of water to private companies.

E'town operates in New Jersey and is one of the largest investor-owned water
utilities in the United States.  E'town is made up of two regulated water
utilities (Elizabethtown Water Company and The Mount Holly Water Company), two
non-regulated contract operations (Liberty Water Company and Edison Water
Company), a regulated waste water company (Applied Wastewater Management Inc),
an engineering/operations business (Applied Water Management Inc) and a
property company (E'town Properties).  In the year ended 31st December, 1998,
E'town supplied 51 billion gallons of water to approximately 234,000 retail
and wholesale customers, serving a population of over 1 million people.

For the twelve months ended 30th September, 1999, E'town had turnover of
USD159.4 million (GBP96.6 million), earnings before depreciation, interest,
tax and amortisation of USD67.8 million (GBP41.1 million), earnings before
interest and tax of USD52.4 million (GBP31.8 million) and profits before tax
of USD37.8 million (GBP22.9 million).  E'town's net assets were USD229.3
million (GBP139.0 million) as at 30th September, 1999.  Thames Water expects
that the transaction will enhance earnings for Thames Water shareholders in
the first full year following completion (on a pre-goodwill basis and taking
account of certain tax credits) with further enhancement expected in the
following year.

E'town has a strong management team and it is Thames Water's intention to work
closely with them in order to support the future development of the Group and
to achieve the added value that will be generated by the combination of these
two successful companies.

The Acquisition is subject to, inter alia, the approval of the New Jersey
Board of Public Utilities and the US anti-trust authorities.  It is not
expected that the Acquisition will have any unfavourable impact on
competition, water rates or the ability of any regulatory agency to exercise
its duty.  These approvals are expected to be secured before the last quarter
of 2000.

The Acquisition is also conditional upon approval by E'town shareholders.
This approval will be sought at a shareholders meeting expected to be held in
the first quarter of 2000.

Thames Water has been advised by Lazard Brothers & Co., Limited and Lazard
Freres & Co. LLC on the proposed acquisition of E'town.  The brokers to the
transaction are Cazenove & Co. and Warburg Dillon Read, the investment banking
division of UBS AG.

Lazard Brothers & Co., Limited, which is regulated in the United Kingdom by
the Securities and Futures Authority Limited, is acting exclusively for Thames
Water and no one else in connection with the Acquisition and will not be
responsible to anyone other than Thames Water for providing the protections
afforded to customers of Lazard Brothers & Co., Limited or for providing
advice in relation to the Acquisition.

Notes to Editors

E'town, which is listed on the New York Stock Exchange, is one of the largest
investor-owned water utilities in the United States, with approximately 540
employees.  E'town's principal operating utility, Elizabethtown Water Company
('Elizabethtown') and its subsidiary, The Mount Holly Water Company, provide
water services to more than a million people in the state of New Jersey.
Elizabethtown processes and delivers 135 million gallons of water on an
average day through over 200,000 meters and around 3,000 miles of pipeline.
Water is supplied to more than 50 municipalities in eight New Jersey counties.
In addition, E'town also supplies bulk water to eight municipal water systems
and three investor-owned utilities.  It has significant water capacity.  The
company benefits from a geographic area with a high density population
together with a high quality and diverse customer base.

E'town has two subsidiaries, Edison Water Company and Liberty Water Company,
engaged in non-regulated contract operations.  In 1997, Edison began operating
Edison Township's 11,600-customer water system under a 20 year contract and,
in 1998, Liberty began operating the city of Elizabeth's 17,900-customer water
system under a 40 year contract.

Applied Water Management Inc, acquired by E'town in June 1998, designs,
builds, owns and operates water and waste water management treatment
facilities as regulated utilities.  Its role is to provide water and waste
water services to smaller communities through the innovative use of membrane
technology.

E'town's property subsidiary sells underdeveloped real estate properties, the
proceeds from which are then reinvested in water and waste water projects.
E'town currently has contracts to sell all of its surplus remaining land
parcels.

Thames Water intends to work closely with E'town's strong management team.
Anne Estabrook, Chairman of E'town since May 1997 and a Director of E'town
since 1985, will have an advisory role within Thames Water International.
Andrew Chapman, president of E'town since May 1997 and a Director of E'town
since 1995, has agreed to lead E'town's management team.  The development of
new opportunities across the United States will continue to be driven by David
Chardavoyne who was appointed in 1998 as President of Thames Water Holdings
Inc.

The table below summaries the historic financial record for E'town:

(United States Dollars in 000's, except customers, employees and per share
data)

                                                Year ended 31st December
                                              1996      1997      1998

Income Statement Data

Operating Turnover                         110,409   133,826   145,480

EBITDA                                      42,971    59,536    65,327

EBIT                                        33,078    47,140    51,648

Net Income                                  15,073    19,260    22,330

Diluted EPS                                USD1.96   USD2.41   USD2.66

Customers                                  195,482   212,927   234,444

Full Time Employees                            400       399       505

The following assumptions are used throughout this press release:

*         A fully-diluted number of shares of 8.9 million
*         USD348.3 million of debt, less USD9.4 million of convertible
          subordinated debentures, plus USD12.2 million of preferred stock,
          less USD10.2 million of cash
*         An exchange rate for conversion of USD1.65 = GBP1