Q&A: Black Holes
When a star and a black hole encounter one another, some of the matter in the star may enter the black hole while a lot of the star's matter may be spun off out into space. What becomes of the contents of two black holes that collide? Is some of the material returned to normal space and time?
We actually know very little about the details of a black hole merger, but we believe it is safe to say that matter inside the event horizon of a black hole will not be spit back out in a collision. However, simulations of supermassive black hole collisions do show an enormous output of gas and radiation. In fact, supermassive black hole collisions may be the powering force behind quasars, some of the brightest objects in the Universe.
The gas in the violent outflow is likely from the matter surrounding the supermassive black holes before collision rather than the matter contained within.
Chandra has a beautiful image and description of a massive black hole merger:
More information on quasars may be found in the X-ray Astronomy Field Guide to Quasars and Active Galaxies: