I read an in-game book, where it is suggested that Tiber Septim may have absorbed the souls of all the living dragons of his era at the very moment of his Apotheosis. (I cant recall the book)

This is a very interesting perspective on ascension which i had not heard before. It also seems to fit with what the story of all the Dwemer disappearing at the same time to form part of a deity


Do living entities need to merge somehow to ascend?

If the dragonborn svcks up the souls of all the dragons that returned to Tamriel will he/she become a god??

There are a couple holes in that first theory. For one thing, by the time of Tiber Septim the dragons were pretty much wiped out. The only ones I can think of that were alive were Paarthurnax and Tosh Raka. For another thing...well, Paarthurnax. If this were true he wouldn't still be around during the time of Skyrim. And no, he wouldn't have been brought back to life. Alduin was the one bringing dragons back, and he wouldn't bring back the traitor who indirectly brought about his defeat.

As for the need to merge, I can kind of see it. Ascending of any sort seems to be done in groups, whether it's the Tribunal at Red Mountain or Tiber Septim along with Zurin and Ysmir.