June 28 (Reuters) - The U.S. Department of Justice has

settled its lawsuit challenging server maker Hewlett Packard

Enterprise's ( HPE ) all-cash acquisition of Juniper Networks ( JNPR )

for $14 billion, according to court filings.

The settlement requires the combined company to divest HPE's

Instant On wireless networking business and license the source

code for Juniper's Mist AI software used in Juniper's WLAN

(Wireless Local Area Network) products.

The joint settlement, filed late on Friday, requires

approval by a judge and would avoid the need for a trial

scheduled for July 9.

The Department of Justice (DOJ), HPE and Juniper did not

immediately respond to a Reuters request for comment outside

business hours.

The DOJ sued to block the deal in January, arguing that it

would stifle competition and lead to only two companies - Cisco

Systems ( CSCO ) and HPE - controlling more than 70% of the U.S.

market for networking equipment.

In February, Juniper denied the DOJ's allegations, saying in

a filing that the complaint does not correctly represent the

market dynamics for wireless network solutions and the

companies' rationale for the deal.

HPE said more than a year ago that it would acquire Juniper,

as it looks to spruce up its artificial intelligence offerings.