Dense cellular aggregates are common in many biological settings, ranging from bacterial biofilms to organoids, cell spheroids and tumors. Motivated by Neisseria gonorrhoeae biofilms as a model system, we present a hydrodynamic theory to study dense, active, viscoelastic cellular aggregates.The dynamics of these aggregates, driven by forces generated by individual cells, is intrinsically out-of-equilibrium. Starting from the force balance at the level of individual cells, we arrive at the dynamic equations for the macroscopic cell number density via a systematic coarse-graining procedure taking into account a nematic tensor of intracellular force dipoles. We describe the basic process of aggregate formation as an active phase separation phenomenon. Our theory furthermore captures how two cellular aggregates coalesce. Merging of aggregates is a complex process exhibiting several time scales and heterogeneous cell behaviors as observed in experiments.In our theory, it emerges as a coalescence of active viscoelastic droplets where the key timescales are linked to the turnover of the active force generation. Our theory provides a general framework to study the rheology and dynamics of dense cellular aggregates out of thermal equilibrium. * vasily.zaburdaev@fau.de