It was a week-long race through a labyrinth of meeting rooms and law firms in Hong Kong’s Central district, to close the A.S. Watson deal. For Lee Ai Ling, then a junior member of Temasek’s Legal & Regulatory team, it was a high-stakes test of endurance, expertise, and teamwork.

The opportunity to acquire a significant stake in A.S. Watson, a leading health and beauty retailer which already boasted 10,500 stores across 25 markets worldwide, emerged early in 2014, at a time when Temasek was looking to align its portfolio with long-term trends, including Asia’s fast-growing middle income populations. The US$5.7 billion investment promised to significantly expand Temasek’s presence in the region’s high-growth markets – but the firm needed to move decisively to seize that opportunity.

“We had started the planning work two weeks earlier, and from the morning we arrived, we were in back-to-back meetings that lasted late into the night. We got very little sleep, but no one stopped until the deal was done,” remembers Ai Ling, now Director of Legal & Regulatory (Transactions).

The deal’s complexity went far beyond the negotiation table. Various teams in Temasek, including its Investment, Legal and Regulatory, Tax, and teams, collaborated closely to navigate the intricate legal and financial landscape of A.S. Watson’s vast operations, and ensure that Temasek’s interests were well protected.

The transaction – Temasek’s single largest overseas investment at the time – boosted its exposure to Asia’s fast-growing consumer sector exponentially. For the team, the signing ceremony, which concluded with a formal dinner, was the first sit-down meal they had that week.

Unity in purpose

By her own admission, the A.S. Watson deal remains one of the “most intense” experiences in Ai Ling’s career to date – including the six years she spent in private practice specialising in mergers and acquisitions (M&A) in Singapore and Shanghai.

Ai Ling joined Temasek in 2011, drawn by the opportunity to continue with high-quality and strategic M&A work in a dynamic company with global ambitions. Three years in, she found herself in Hong Kong as part of the legal team conducting due diligence on various aspects of the operations of a retailer whose stores she had often shopped in.

There were many moving parts, Ai Ling says. The team delved into every aspect, from due diligence on the retailer’s operations, financials, and taxes to structuring the transaction and formulating governance rights that matched the scale of the investment. Retail being a “consumer-facing business” meant there were additional factors to consider, including any issues with consumers, employees, or other stakeholders.

Ahead of the deal being closed, various regulatory applications also needed to be filed and the necessary approvals obtained in the multiple jurisdictions in which the retailer operated.

“We had to zoom into all that very quickly,” says Ai Ling.

In the high-pressure environment, there was a clear unity in purpose. “Everyone pulled their weight and was very open and transparent about sharing their views,” she says. “Even as a junior team member, I was able to express concerns that were later reflected in the negotiations.” 

The experience left a lasting impression. “We all worked together to get the deal over the line. It made me incredibly proud to be part of the Temasek team.”

Owning the morning after

The A.S. Watson deal was transformative for Ai Ling, both personally and professionally. It shaped her understanding of how Temasek could move quickly to seize opportunities, while maintaining rigorous standards of diligence and collaboration.

Today, she remains in close contact with her legal counterparts at A.S. Watson, helping to foster the relationship between the two entities. Their discussions often touch on issues like sustainability in retail and supply chain resilience, areas that both companies have been tracking closely. “It’s a very open channel. We share how we think regulatory developments may impact our investee companies, ecosystem and partners, and they share what they see in terms of implementation and enforcement trends in their respective industries.”

The investment has also shaped how Temasek pursues increasingly complex deals across various jurisdictions. “Staying nimble is very important in this climate,” says Ai Ling, pointing to the growing impact of geopolitics, technology advancements, and regulatory shifts on investment priorities.

Temasek’s Legal & Regulatory team is not just a guardian that protects the firm. The team also anticipates potential issues and risks, taking pre-emptive steps to ensure Temasek is well-positioned to address them, she notes. “It's no longer just about knowing the law, but about detecting the emerging trends or issues early, and taking steps to mitigate them,” she says.

This forward-looking, proactive approach is crucial given the long-term nature of Temasek’s portfolio. “We’re constantly monitoring legal developments and trends, and constantly adapting so we can make informed decisions that ensure our investments remain resilient in the increasingly complex and dynamic environment in which we operate.”

For Ai Ling, the work is as rewarding as it is challenging. “It shapes who you are and how you see things,” says Ai Ling. “I might live another 50 years, but I have two young children who will outlive me. We always think about the long-term impact of our decisions, and ensure that we own the morning after.”