UPDATE 1-Texas settles with T-Mobile, Sprint over merger -statement

(Adds Legere comment, background on deal)

WASHINGTON, Nov 25 (Reuters) - Texas' attorney general has settled with T-Mobile Inc and Sprint Corp and will drop his opposition to the $26.5 billion merger, leaving just Democratic attorneys general fighting the combination.

Texas Attorney General Ken Paxton had been the only Republican among the state attorneys general who had filed a lawsuit to stop the merger of the No. 3 and No. 4 wireless carriers.

Without Texas, 14 states and the District of Columbia argue that the deal will lead to higher prices for consumers. A trial is set to begin on December 9 in Manhattan federal court.

In a statement issued on Monday, Paxton's office said the agreement precludes the companies from raising prices for Texans for five years and commits the merged company to 5G network throughout Texas, including rural areas, during the next six years.

T-Mobile CEO John Legere called the announcement "incredible news," tweeting: "Texas knows that the #NewTMobile will create jobs and deliver 5G to rural areas of the state and beyond!"

The U.S. Justice Department and the Federal Communications Commission signed off on the merger after the companies agreed to divest Sprint's prepaid businesses, including Boost Mobile, to satellite television company Dish Network Corp, and provide it with access to 20,000 cell sites and hundreds of retail locations. That deal is worth about $5 billion. (Reporting by Diane Bartz and David Shepardson; Editing by Chizu Nomiyama and Dan Grebler)