Volkswagen is targeting a valuation of up to €75 billion for luxury sportscar maker Porsche, in what will be Germany's second-largest initial public offering (IPO) in history.

Volkswagen will price preferred shares in the flotation of Porsche AG at €76.50 to €82.50 per share, the carmaker said, translating into a valuation of €70 billion to €75 billion.

At the upper end of the range, first reported by Reuters, it would become Europe's third largest IPO on record, according to Refinitiv data.

Trading will begin on the Frankfurt Stock Exchange on September 29, Volkswagen said.

As part of the listing, 911 million Porsche AG shares will be divided into 455.5 million preferred shares and 455.5 million ordinary shares.

Up to 113,875,000 preferred shares, carrying no voting rights, will be placed with investors over the course of the IPO.

The sovereign wealth funds of Qatar, Abu Dhabi and Norway as well as mutual fund company T Rowe Price will subscribe up to €3.68 billion worth of preferred shares as cornerstone investors, at the upper end of the valuation, Volkswagen said.

"We are now in the home stretch with the IPO plans for Porsche and welcome the commitment of our cornerstone investors," Volkswagen's chief financial officer and chief operating officer Arno Antlitz said.

In line with Volkswagen's agreement earlier in September with its largest shareholder Porsche, 25% plus one ordinary share in the sportscar brand, which do carry voting rights, will go to Porsche SE at the price of the preferred shares plus a 7.5% premium.

Porsche SE, the holding firm controlled by the Porsche and Piech families, will finance the acquisition of the ordinary shares with debt capital of up to 7.9 billion euros, it said in a separate statement.

Total proceeds from the sale will be €18.1 billion to €19.5 billion.

If the IPO goes ahead, Volkswagen will call an extraordinary shareholder meeting in December where it will propose to pay 49% of total proceeds to shareholders in early 2023 as a special dividend.

A stock exchange prospectus is expected to be published today, after which institutional and private investors can subscribe to Porsche shares.