Luminous Red Novae (LRNe) are astrophysical transients associated with the partial ejection of a binary system's common envelope (CE) shortly before its merger. Here we present the results of our photometric and spectroscopic follow-up campaign of AT 2018bwo (DLT 18x), a LRN discovered in NGC 45, and investigate its progenitor system using binary stellar-evolution models. The transient reached a peak magnitude of M r = −10.97 ± 0.11 and maintained this brightness during its optical plateau of t p = 41 ± 5 days. During this phase, it showed a rather stable photospheric temperature of ∼3300 K and a luminosity of ∼ 10 40 erg s −1 . Although the luminosity and duration of AT 2018bwo is comparable to the LRNe V838 Mon and M31-2015LRN, its photosphere at early times appears larger and cooler, likely due to an extended mass-loss episode before the merger. Towards the end of the plateau, optical spectra showed a reddened continuum with strong molecular absorption bands. The IR spectrum at +103 days after discovery was that of a M8.5 II type star, analogous to an extended AGB star. The reprocessed emission by the cooling dust was also detected in the mid-infrared bands ∼1.5 years after the outburst. Archival Spitzer and Hubble Space Telescope data taken 10 − 14 years before the transient event suggest a progenitor star with T prog ∼ 6500 K, R prog ∼ 100 R and L prog = 2 × 10 4 L , and an upper limit for optically thin warm (1000 K) dust mass of M d < 10 −6 M . Using stellar binary-evolution models, we determined the properties of binary systems consistent with the progenitor parameter space. For AT 2018bwo, we infer a primary mass of 12−16 M , which is 9−45% larger than the ∼11 M obtained using single-star evolution models. The system, consistent with a yellow-supergiant primary, was likely in a stable masstransfer regime with −2.4 ≤ log(Ṁ/M yr −1 ) ≤ −1.2 a decade before the main instability occurred. During the dynamical merger, the system would have ejected 0.15−0.5 M with a velocity of ∼500 km s −1 .