FRANKFURT/MUNICH (Reuters) - The supervisory board of Siemens AG (>> Siemens) agreed on Wednesday to prepare to list its Healthineers medical equipment business on the Frankfurt stock exchange in the first half of 2018.

The move comes as the German industrial conglomerate is seeking to simplify its structure and the Healthineers spin-off will be the country's biggest share offering since Deutsche Telekom (>> Deutsche Telekom) listed in 1996, potentially valuing the company at 40 billion euros (£35.35 billion).

"The public listing is the next logical step and the foundation for expanding our strong position as a leading global supplier of healthcare technology,” Michael Sen, chairman of the Siemens Healthineers supervisory board, said in a statement.

"Frankfurt is one of the world’s largest trading centres for securities, and its importance will continue to increase due to Brexit. As a highly liquid trading venue, Frankfurt is attractive for investors from around the world," he added.

Sen had previously highlighted the attractions of a listing in New York, where most of Healthineers' peers are listed, pointing also to high liquidity and expertise about the sector among the financial community.

But Frankfurt is seeking to gain in stature as banks prepare to move staff there from London ahead of Britain's divorce from the European Union.

With the initial public share offer Siemens is expected to sell 15-25 percent of Healthineers, which makes X-ray and MRI machines, sources familiar with the matter have said. That implies stock worth 6-10 billion euros could be put up for sale.

Siemens has already appointed Goldman Sachs (>> Goldman Sachs Group), Deutsche Bank (>> Deutsche Bank) and JP Morgan (>> JP Morgan Chase & Company) as lead organisers for the Healthineers share sale.

It said BNP Paribas, BofA Merrill Lynch, Citigroup and UBS were engaged as further syndicate banks

(Reporting by Arno Schuetze and Alexander Huebner; Writing by Douglas Busvine, Georgina Prodhan and Emma ThomassonEditing by Keith Weir, Greg Mahlich)