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The U.S. Department of Justice (DOJ) approved in principle, the proposed $26 billion merger between Sprint Corporation (NYSE:S) and T-Mobile (NASDAQ: TMUS).

The DOJ announced its settlement agreement with Sprint and T-Mobile regarding the proposed merger on Friday. Five states including Nebraska, Kansas, Ohio, Oklahoma and South Dakota were part of the deal.

The stock price of Sprint and T-Mobile surged on Friday after the DOJ’s announcement. Sprint shares were up more than 7 percent to $8.01 each while T-Mobile shares climb more than 5 percent to $83.98 each around 2:56 p.m. in New York.

 Sprint and T-Mobile to divest assets to Dish Network

The settlement includes a package of divestitures to Dish Network (NASDAQ: DISH) to enable it to become the fourth largest facilities-based wireless provider in the country.

Under the terms of the settlement, the combined company will divest Sprint’s certain spectrum assets and prepaid business including Boost Mobile, Virgin Mobile and Sprint prepaid to Dish Network.

Additionally, the combined company will make available at least 20,000 cell sites and hundreds of retail locations to Dish Network.

Furthermore, T-Mobile will provide Dish Network with robust access to its network for seven years while the satellite television provider builds its own 5G network.

Moreover, the settlement requires T-Mobile and Sprint to quickly deploy multiple high-quality 5G networks.

In a statement, Assistant Attorney General Makan Delrahim of the DOJ’s Antitrust Division, “With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks.”

He added, “Today’s settlement will provide Dish with the assets and transitional services required to become a facilities-based mobile network operator that can provide a full range of mobile wireless services nationwide.”