Luminous Red Novae (LRNe) are astrophysical transients associated with the partial ejection of a binary systems common envelope (CE) shortly before its merger. Here we present the results of our photometric and spectroscopic follow-up campaign of AT2018bwo (DLT18x), a LRN discovered in NGC45, and investigate its progenitor system using binary stellar-evolution models. The transient reached a peak magnitude of $M_r=-10.97pm0.11$ and maintained this brightness during its optical plateau of $t_p = 41pm5$days. During this phase, it showed a rather stable photospheric temperature of ~3300K and a luminosity of ~$10^{40}$erg/s. The photosphere of AT2018bwo at early times appeared larger and cooler than other similar LRNe, 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 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 $T_{prog}sim 6500$K, $R_{prog}sim 100R_{odot}$ and $L_{prog}sim 2times10^4L_{odot}$, and an upper limit for optically thin warm (1000 K) dust mass of $M_d<10^{-6}M_{odot}$. Using stellar binary-evolution models, we determined the properties of binary systems consistent with the progenitor parameter space. For AT2018bwo, we infer a primary mass of 12-16 $M_{odot}$, which is 9-45% larger than the ~11$M_{odot}$ obtained using single-star evolution models. The system, consistent with a yellow-supergiant primary, was likely in a stable mass-transfer regime with -2.4<log ($dot{M}/M_{odot}$/yr)<-1.2 a decade before the main instability occurred. During the dynamical merger, the system would have ejected 0.15-0.5$M_{odot}$ with a velocity of ~500 km/s.
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